Last year we addressed anticipated changes to community based Medicaid eligibility (home care) with the passage of the 2020 budget. Be- cause of the pandemic, these new rules have not been implemented. They are currently deferred until October 2022. However, that could change depending on the severity of the new variants. In the last few weeks, the legislature passed the 2022 budget which also impacts eligibility for Medicaid benefits for both home and nursing home care. This article will discuss the status of both.
In 2020, the legislature changed the impact that transferring assets will have when applying for home care. Prior to the 2020 budget, no penalty was assessed if assets were transferred prior to the submission of a home care application. The transfer of assets alone, whether they were valued at one dollar or ten million, would not disqualify an applicant from eligibility for Medicaid home care. However, the 2020 budget changed that dramatically. Applications for home care benefits will have to be accompanied by thirty months of financial records. But for the pandemic, as of October 2020, a thirty-month look back period will identify “uncompensated transfers” during the period and cause the applicant to be responsible for the cost of his or her care. For example, the purchase of a car for $40,000 would not disqualify one from receiving home care because something of equivalent value was received in return for money – the car. However, if one gives a gift in that same sum, $40,000, because nothing was received in return, Medicaid will penalize the transferor and deny home care benefits for a period of time commensurate with the value of the gift once the new rules are enforced.
Another change made in the 2020 budget is the level of care an applicant requires before he or she is eligible for Medicaid. Previously, to be eligible, an applicant needed to be unable to perform two of six activities of daily living: eating, bathing, dressing, transferring, toileting, and ambulating. Under the new rules, unless the applicant is suffering from dementia, eligibility is based on the inability to perform three of the six activities of daily living. This change will become effective this month.
In 2022, an applicant for home or nursing care Medicaid benefits is ineligible if their available resources are worth more than $16,800. Additionally, a home care applicant is only able to retain income of $934 a month. Excess income must be used to pay for care before Medicaid benefits are available unless the Medicaid recipient employs certain strategies to protect the excess income. The 2022 budget which was recently passed by the legislature does not become effective until 2023. Under this new budget, in 2023, the income allowance will increase to $1,563 and the resource allowance has almost doubled to $28,134! This will not only enable an applicant to retain more income and resources, but it will also impact the length of the penalty period imposed for uncompensated transfers made during the look back period.