The goal of this article is to explain key factors in MaineCare eligibility for seniors (age 65 or older) in nursing homes or certain assisted living facilities, or to receive nursing care at home. "MaineCare" is Maine's medical benefits program that implements the federal Medicaid program and includes some state-funded programs. MaineCare includes healthcare programs for Mainers of all ages, but this article addresses only programs for seniors age 65 and older.
The federal Medicaid program for seniors is designed to supplement a senior's ability to pay for nursing home care with his or her own income and assets. In order to be eligible for this Medicaid program, the senior and his or her spouse must meet income and asset limitations, as applied through the state program. The MaineCare program allows a senior to be eligible in respect to income if his or her monthly income is less than the private-pay rate for the facility where the individual is institutionalized. The average private-pay rate for semi-private nursing home rooms in Maine is now $6,778 per month, so most Mainers qualify in regard to income.
The individual must qualify medically by requiring assistance with at least three "activities of daily living" (ADLs) or having dementia. This is assessed for the Department of Health and Human Services (DHHS) by a private contractor named Goold Health Systems, which does all of the DHHS medical eligibility assessments. DHHS orders a medical assessment when a senior files a MaineCare application, but the individual or family may also request Goold to do an assessment earlier as part of preparing to apply for MaineCare benefits. Doing so can be very important because DHHS will not authorize nursing home benefits to begin for a month prior to the month of the medical assessment. Additionally, if the Goold assessment determines that the individual does not qualify for nursing care, knowing this can make a substantial difference in the financial planning to be done.
To qualify for MaineCare, the individual's "countable" assets are limited to $2,000. However, Maine law allows a MaineCare applicant or recipient to possess a bank account or other investment account worth $8,000, which is "noncountable." Thus, in Maine we generally speak of a person being allowed to have a total of $10,000 of liquid assets. This includes cash, savings, checking accounts, CDs, IRAs, the cash value of life insurance, etc. Most states only allow $2,000 in liquid or otherwise available assets. Maine's unique $10,000 number is often helpful. Note: If both spouses share a room in a nursing home, the above limits are $3,000 for total "countable" assets and $12,000 for the investment account, so the institutionalized couple sharing a room may possess a total of $15,000.
If one spouse is in a nursing home but the other spouse lives at home, then federal law and the MaineCare eligibility rules allow higher countable asset limits for the Community Spouse to avoid "spousal impoverishment." The Community Spouse may possess countable assets up to the Community Spouse Resource Allowance (CSRA), a number that changes annually as of Jan. 1. For 2008, the CSRA is $104,400. The Community Spouse may own countable assets up to $104,400, and the Institutionalized Spouse may still own up to $10,000.
The above numbers do not take into consideration "noncountable" assets. Part of the process of MaineCare planning is restructuring the individual's and spouse's assets and form of ownership to make as many assets as possible noncountable rather than countable and, therefore, exempt from the above limits.
While an individual receives MaineCare nursing home long-term care benefits, his or her net personal monthly income is paid to the nursing home except for allowed deductions for Medicare and private health insurance premiums, taxes if applicable (rarely), and a "personal needs allowance" of $40 per month. This is the general rule, unless the spousal impoverishment provisions allow the Community Spouse to receive some or all of the Institutionalized Spouse's net income.
If the Community Spouse's personal monthly income is less than $2,225 (the sum of the Minimum Monthly Income Standard, $1,712, and the Monthly Excess Shelter Allowance, $513, both of which increase annually on July 1), then he or she is entitled to as much of the Institutionalized Spouse's net income or income-producing assets as it takes to bring his or her income up to $2,225. If his or her actual monthly shelter expenses exceed $513, the total of his or her personal income plus income from the Institutionalized Spouse can be increased to the Maximum Monthly Income Allocation of $2,610, a number that increases annually on Jan. 1. (The Maximum Monthly Income Allocation concerns only the Community Spouse's eligibility to receive income or income-producing assets from the Institutionalized Spouse; it does not limit the Community Spouse's personal income if he or she already has more income than that number.)
MaineCare pays the difference between the individual's net monthly income and the "reimbursement rate" for the particular nursing home. The reimbursement rate is less than the private-pay price for the nursing home. It is set by the Maine Department of Health and Human Services based on the economics of the particular facility. It is my understanding that MaineCare reimbursement rates for nursing homes are typically $1,000 or more lower than the private-pay rate. The MaineCare recipient receives nursing home long-term care at this discounted price. Over a long stay of several years, this savings can be substantial. Even though the state may eventually be reimbursed through "estate recovery," the possibility of there being something left from a MaineCare recipient's or couple's life savings after estate recovery is greater than if noncountable assets are consumed to pay for nursing home care at the private-pay rate prior to going onto MaineCare. (Of course, the best solution is often long-term care insurance, but that is a topic for another article.)
Under some circumstances, the state can assert an estate recovery claim to be reimbursed from assets of the deceased Medicaid recipient. The state's claim arises from Medicaid benefits provided by the state at and after age 55. Federal law requires states to pursue estate recovery against assets in the decedent's probate estate - assets of the decedent that pass by will or intestacy (lack of an effective will). Federal law allows, but does not require, states to pursue estate recovery from nonprobate assets - those that pass by joint tenancy with right of survivorship, certain trusts, beneficiary designations, etc. Maine's estate recovery law provides full authority to pursue estate recovery from all probate and nonprobate assets of the decedent. However, some assets are more difficult to pursue than others, and some are protected by other laws such as exemptions within the Maine Probate Code. Aligning the client's assets and the form of ownership in order to minimize risk of estate recovery is part of the elder law attorney's planning. Often this work is best done before the MaineCare application is prepared and filed.
In addition to nursing home benefits, MaineCare can pay for nursing-care benefits in the individual's home or non-nursing benefits in certain assisted living facilities. MaineCare's assisted living ("residential care") eligibility criteria are nearly identical to the nursing home criteria. For residential care, however, the individual does not need to satisfy the medical criteria of the Goold assessment, the "spousal impoverishment provisions" do not apply, and the personal needs allowance is $70 per month. On the favorable side, not being subject to the spousal impoverishment provisions means that the Community Spouse's countable assets are not limited to $104,400 if the assisted living spouse is already located in the facility. On the unfavorable side, the Community Spouse cannot receive any of the assisted living spouse's net income, which must all be paid to the facility. These and other aspects of MaineCare, such as eligibility transfer penalties, brand new benefits of long-term care insurance, and estate recovery, will be discussed more specifically in future articles.
Copyright 2008, Martin C. Womer. Printed with Permission.
Martin C. Womer is one of Maine's leading elder law attorneys. He is the founder and managing attorney of the Maine Center for Elder Law, LLC in Kennebunk, which assists seniors and families with long-term care planning, MaineCare applications, estate planning and administration, powers of attorney, wills, trusts, guardianships, conservatorships, real estate transactions and charitable giving. He may be contacted at 608-6995 or mwomer@mainecenterforelderlaw.com.
