Medicaid eligibility rules are complicated, and require that a Maryland resident meet certain medical and financial guidelines to receive Medicaid Long-Term Care (LTC) benefits. Each applicant must undergo a medical and financial assessment, which Medicaid will use to determine their needs and whether they meet the guidelines for eligibility.
Before a senior can receive Medicaid benefits for long-term care, the state must determine how much medical assistance they require. Seniors must prove they require skilled nursing care before they can receive Medicaid coverage for a nursing home or qualify for a Medicaid Waiver. An applicant who chooses skilled nursing care without a doctor’s recommendation, then they will be ineligible for Medicaid coverage.
To determine whether an patient requires skilled nursing, either a doctor or therapist will conduct a health assessment, known as the Patient Review Instrument (PRI) Screen, to find our their overall health condition. During the assessment, the doctor or therapist will ask the patient if they are having any troubles walking, dressing themselves, showering, or otherwise taking care of themselves to get a glimpse at what types assistance they need. The assessment will help the patient plan for future needs, and give Medicaid an idea of how much the patient’s LTC costs will be.
After conducting the assessment, the doctor or therapist will complete a Medical Summary, outlining the patient’s health conditions and activities in which they may need assistance. The patient must apply for Medicaid within 30 days of completing the PRI Screen; if they do not apply within the time period, then the patient will need to receive another PRI Screen.
Financial Requirements - Asset Limits
To qualify for Medicaid in Maryland, a senior must prove they cannot afford their care with their personal assets and resources alone. Individuals are subject to different asset limits than married couples, and there are home equity limits in place for homeowners seeking Medicaid.
Medicaid requires all beneficiaries to stay within their income limits to receive coverage, or participate in a spend-down to offset their medical costs. Each applicant is subject to an asset limit, which determines how much money they are allowed to have in personal assets like homes and vehicles.
That being said, not all assets are applicable toward the asset limits, and some are exempt from Medicaid’s consideration. The assets Medicaid takes into consideration are called countable, or “non-exempt,” assets. These include bank accounts, bonds, stocks, annuities, trusts, and life insurance policies. Medicaid believes an individual with enough of available assets can use them to pay for their health care, and they will not step in until all of these resources have been liquidated to cover the costs of care.
Married and Community Spouse Limits
Whenever a person applies to Medicaid, their spouse’s assets are considered for approval. Medicaid considers all of a couple’s assets jointly, regardless of who they belong to primarily. When a married person needs long-term care and their spouse doesn’t, their husband or wife is known as the “community spouse” by Medicaid. A community spouse is entitled to keep a certain amount of the couple’s assets without impacting their partner’s Medicaid application, known as the Community Spouse Resource Allowance (CSRA). The CSRA is determined on a federal level, but states can impose their own rules. In Maryland, community spouses are allowed up to $123,600 in assets. If they have fewer than $24,720 in assets, the institutionalized spouse can transfer some of their assets to their spouse, up to the $123,600 limit.
The asset limit for individuals in Maryland is $2,500. This means an unmarried senior in Maryland must not have more than $2,500 in non-exempt assets to qualify for Medicaid. Married couples who both require care are subject to a different limit, which allows $3,000 per person for the first six months of coverage, and $2,500 thereafter.
Each Medicaid applicant is allowed one exempt home as long as a spouse, a child under the age of 21, or a disabled person uses it as a primary residence. In this case, Medicaid does not consider the home an available asset, and will not use it to deny the applicant coverage.
Homes are subject to an equity value limit of $572,000, and individuals with homes valued beyond the limit are subject to Medicaid denial. Once a home has an equity value of $572,000 or more, Medicaid will consider it an available asset, and can demand the applicant to liquidate it if they want to receive benefits. Additionally, Medicaid may place a lien on the home’s proceeds if the owner sells it during or after their care period.
Vehicles can qualify as exempt assets if they fit certain criteria. If a senior has a vehicle, they may keep it and still qualify for Medicaid if they use it as a means to transport them to their place of employment, to medical appointments and treatments, or if it's the primary vehicle of the individual’s spouse. Vehicles are also exempt if they are modified to accommodate a disability. If a person’s vehicle meets any of these requirements, Medicaid won’t consider it as a countable asset, without an allowable value limit.
In addition to homes and vehicles, Medicaid may consider an end-of-life expense account or burial account as a non-exempt asset. Burial spaces and prepaid burial trusts can also qualify as exempt assets, if the funds cannot be recovered. End-of-life expense accounts and burial accounts are exempt with a cap of $1,500.
Unlike many states, IRA’s and other similar retirement accounts are non-exempt in the state of Maryland, including cases where they are owned by the applicant’s spouse.
Financial Requirements - Income Limits
A person’s income is also taken into consideration when they apply for Medicaid, and Maryland’s Medicaid program does not have income caps in place. In other words, all an individual’s financial resources must be put toward their care before they will provide assistance (with a monthly allowance of $77 to cover the individual’s personal needs).
Modified Adjusted Gross Income
Medicaid uses a Modified Adjusted Gross Income (MAGI) figure to determine a household’s eligibility for coverage. The MAGI uses a person’s gross taxable income, their tax-free interest, and their non-taxable Social Security benefits (excluding SSI) to determine their eligibility for coverage. By using the MAGI formula, the state can predict a person’s yearly income and use it to determine if the person is eligible for Medicaid. This means that if your loved one makes $20,000 a year before taxes, they should use their gross yearly income to fill out their Medicaid application, as opposed to their net income.
Supplemental Security Income
If a person qualifies for SSI in Maryland, they are automatically considered for Medicaid coverage. There is no minimum amount of SSI a person must receive to qualify for Medicaid - if they receive any amount of SSI benefits, they can receive Medicaid benefits. Individuals are not required to list their SSI benefits when they submit their application for Medicaid, regardless of the amount. Because Maryland residents are automatically considered for Medicaid if they receive SSI benefits, Maryland is not categorized as a 209(b) state.
Unlike assets, which are considered jointly, Medicaid considers income individually, meaning a person cannot be denied benefits based on their partner’s income. Spouses of married applicants are allotted a maximum monthly income allowance of up to $3,022, as long as the spouse is not also receiving Medicaid benefits for long-term care. An applicant’s spouse is also entitled to a Minimum Monthly Needs Allowance (MMMNA) of $2,002. If the spouse does not have an income of at least the MMMNA, the Medicaid applicant may transfer a portion of their income to the spouse without facing a penalty.
Medicaid Spend Down
Seniors are expected to put all of their assets and income toward their long-term care before Medicaid will step in, which can make it a challenge for some seniors to get coverage. They may have too much income to qualify for Medicaid, but they may not be able to cover their medical bills in total. For these reasons, Maryland is a “medically needy” state, which allows applicants with extensive, regular medical need to receive coverage, regardless of their income. To prove they are medically needy, a person must spend down on their medical expenses before Medicaid will step in.
Each medically needy state has a spend-down period, which they use to evaluate an applicant’s expenses and income. In Maryland, the spend-down period is six months. During those six months, a person must reduce their income to below the Medically Needy Income Limit (MNIL) to fulfill the spend-down. Once the person earns enough income to satisfy the MNIL, they are eligible for Medicaid for the remainder of the six month period. After the six month period ends, their eligibility resets and they must again attain enough medical expenses to meet the MNIL.
The MNIL in Maryland is different for individuals and married couples. Individuals are allowed a maximum income of $350, and couples are allowed up to $392. Any income beyond these limits must go toward the applicant’s medical expenses if they wish to receive Medicaid benefits.
Contact a Wayside Legal Elder Law Attorney Today
Wayside Legal LLC is an award-winning law firm located in North Bethesda, Maryland, with experience handling Medicaid issues in Maryland, D.C., and Virginia. If you are facing a situation where you need assistance with long term planning, contact a Wayside Legal attorney today for a consultation to discuss your specific elder law issues.