Medicaid Planning Traps: Health Eligibility & Facility Placement
It does not happen often, but sometimes two spouses will want to move into an assisted living or skilled nursing facility together, and they ask if Medicaid will cover their continued stay in the facility once they run out of money. Typically one spouse is much healthier than the other in such a situation. For all the talk about Medicaid financial eligibility, the primary and most overlooked requirement is that anyone applying for Medicaid benefits in an assisted living or skilled nursing facility needs to meet a medical requirement.
The standards for Medicaid health eligibility are identical as to the standards for the federal SSI program, which is to say they are complex on the margins and not to be trifled with. A potential Medicaid applicant with severe dementia who needs assistance for basic tasks is easily going to be eligible for Medicaid, but their caregiver spouse who still walks two miles a day probably will not be. The trouble is that once the couple's funds are exhausted, the healthy spouse would have to leave and go back to “the community” without the benefit of any resources or (often) the institutionalized spouse's income. This is not a good thing.
Likewise, when clients ask me if assisted living is a good option for their loved ones, my answer takes two parts. First, in terms of care, it is often the least restrictive placement available, and given the preference it is the environment in which their loved one would probably thrive most easily. However, the financial burdens of an assisted living are different than a skilled nursing facility, in large part because Medicaid benefits are usually not retroactive for assisted living facilities. There is a “coverage gap” during the time between when your family runs out of money and when the county reviews the Medicaid application, and that could lead to an unpaid bill of tens of thousands of dollars. The assisted living facility expects to be paid for the services it provides, and the choice may be between having the family potentially pay for that care, and moving your loved one out to a skilled nursing facility before they are qualified for Medicaid.
It goes without saying that this process is often not well explained to families during the critical time where they are trying to educate themselves and make the right decision. It is important that families secure an advocate who can help them through this time so they can make a decision.
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