Community vs. Chronic Medicaid

Community vs. Chronic Medicaid

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By Nancy Burner, Esq.

The Question:

My mom has been a recipient of Community Medicaid. As her condition is deteriorating, it is apparent that she will require long-term care in a nursing facility. I have heard that her Community Medicaid will pay for the nursing facility. Is that correct?

The Answer:

No, Community Medicaid will not pay for long-term care in a nursing home. Community Medicaid is the program that covers care at home; such has a personal care aide. Chronic Medicaid is the program that covers nursing home care. The requirements and application process for Community Medicaid and Chronic Medicaid are very different. An individual is unable to receive both Community and Chronic Medicaid simultaneously, so it is important to know the differences and make sure you have the correct Medicaid in effect.    

For 2016, an individual applying for Community Medicaid can have no more than $14,850, not including their home, in resources and no more than $845 per month in income. Qualified funds such as IRAs or 401(K)s are exempt, but the applicant is required to take periodic distributions that are counted as income each month.

While these limitations may seem daunting, the good news about Community Medicaid is that there is no look-back period and the individual can opt to use a pooled trust to preserve any excess income above the $845. That means someone looking to get care at home can transfer assets and set up a pooled trust in one month and be eligible for Community Medicaid in the following month.

This is much different than Chronic Medicaid. For 2016, an individual applying for Chronic Medicaid can have no more than $14,850 in resources, including a home, and no more than $50 per month in income. There is no pooled trust option to protect the excess income.

Like Community Medicaid, qualified funds such as IRAs or 401(K)s are exempt, but the applicant is required to take periodic distributions that are counted as income each month.

Chronic Medicaid has a five-year look-back. The look-back refers to the period of time that the Department of Social Services will review your assets and any transfers that you have made. To the extent that the applicant has made transfers or has too many assets in their name to qualify, they will be ineligible for Medicaid.

However, there are some exempt transfers that the applicant can make that will not render them ineligible. If transfers were done in order to qualify the individual for Community Medicaid, those same transfers may pose an issue for a Chronic Medicaid application. 

Due to the differences in Community and Chronic Medicaid requirements and regulations, it is imperative to consult with an expert.

Nancy Burner, Esq. practices elder law and estate planning from her East Setauket office.