The maximum monthly income for a LTC Medicaid applicant is determined by taking the approved daily rate for the applicant’s particular bed, and multiplying that number by 31. The approved daily rate is the amount Medicaid has agreed to reimburse that specific facility for care, and it varies from facility to facility. The approved daily rate for each facility in North Carolina can be found here. Once you have found the applicant’s facility, multiply that number by 31. The product is the income limit for the applicant.
Generally speaking, the income limit is somewhere around $4,500 per month. If an applicant’s income exceeds the monthly limit, the applicant is not eligible for LTC Medicaid assistance, even if the private rate for the facility is higher than the approved daily rate. In some instances, it may be possible to reduce an applicant’s monthly income, but those instances are very situational.
If the applicant’s income is less than the income limit, then it is necessary to move to the next step: determining the applicant’s assets. Important note: the computation of income requires the inclusion of all income received by an applicant, unless the income falls under an allowed exclusion. Additionally, the calculation of income requires the addition of an applicant’s Medicare Part A premium back into their Social Security amount. This is because once an applicant begins receiving Medicaid, the State of North Carolina will pay the recipient’s Part A premium. Just remember, an applicant’s income isn’t only the amount Social Security directly deposits into their checking account each month.
Generally speaking, an applicant for LTC Medicaid may not have assets that exceed $2,000.00. It is easier to say what does not count as an asset than what does. These items do not count against the applicant’s $2,000 asset limit:
The applicant’s home (and all property touching the home) does not count against the $2,000 limit. (It may, however, be subject to estate recovery following the applicant’s death, so it is important to talk to an attorney about ways to protect this property).
Life insurance that has a face (death payout) amount of less than $10,000. If the applicant has more than one insurance policy, the face values of all policies are added together, and if the sum of those values exceeds $10,000, then the cash value of all of those policies counts against the applicant’s $2,000 limit. Again, it is only the cash value that is considered. So if, for example, the applicant had a $150,000 term life policy (which has no cash value) would cause no problems for the applicant. But if the applicant had a $20,000 whole life policy with a cash value of $15,000, that cash value would have to be spent down before the applicant would be eligible for LTC Medicaid – assuming that is the only asset.
Real property that is owned by the applicant jointly (as tenants in common or joint tenants with the right of survivorship) with someone else does not count against the $2,000 limit. Again, it is extremely important that ownership of this property be properly structured in order to protect it from estate recovery, so contact an attorney when the applicant owns property in this manner.
Generally speaking, anything not listed above is going to count against an applicant’s $2,000 limit. So bank accounts, investment accounts, land, business interests, etc., all count against the $2,000 limit, and must be spent down before the applicant will be eligible for LTC Medicaid.
Spend down can be conducted in ways that are beneficial to the applicant, but it requires an understanding of the Medicaid rules and regulations. Contact our office so that we can help guide you in spending down in the ways most beneficial to the applicant and their estate.
Assuming an applicant meets the income and asset requirements, they will be eligible for LTC Medicaid. Medicaid will issue a notice to the applicant that says that the applicant has been approved, and what the applicant’s Patient Monthly Liability (PML) will be. PML is the amount that the applicant will be responsible for paying to the facility from the applicant’s fund. Generally speaking, it will be an amount equal to the applicant’s monthly income, minus a $30 per month personal allowance. Medicaid will pay, directly to the facility, the difference between the approved rate and the PML.