Black & White Rules?
The first thing a law student learns is there is no such thing as a “black and white” rule. To every rule there is an exception (and probably many!). These exceptions make the rules of our society vastly more colorful than the average person would expect, and Oregon Medicaid is no different. Many people have heard the requirements to qualify for Medicaid are very strict. The rules are as follows: the applicant must 1. Need assistance with activities of daily living; 2. Have income under $2,349 a month; and 3. Have $2,000 or less in assets. On their face, these rules appear to exclude most people from qualifying for Medicaid benefits to pay for long term care. However, the exceptions to these rules make Medicaid far more inclusive than first meets the eye.
Exceptions to the Rules
There are many exceptions to the above rules (far more than can be listed here). But here are a few exceptions that apply to a broad group of people:
- $2,349 Income limit:
- For married applicants, the income of the well spouse is NOT counted for qualification. Only the income of the ill spouse is counted.
- Applicants with income over $2,349 a month may still qualify by creating a special Trust called an Income Cap Trust. Even an applicant with $3,000 a month (or more!) in income may still qualify for benefits with an Income Cap Trust.
- $2,000 Asset limit:
- First, for Medicaid purposes, there are “countable” assets and “excluded” assets. Countable assets are those assets Medicaid will use in it determination of eligibility.
- Excluded assets may include—but are not limited to—your personal residence, 1 vehicle, and personal belongings.
- Countable assets may include—but are not limited to—bank accounts, IRA/401k, and cash from life insurance.
- While an unmarried Medicaid applicant must have less than $2000 in countable assets, a married applicant’s spouse may keep 50% of their countable assets up to $128,640, and possibly more!
The obstacle for most clients in qualifying for Medicaid is being “over resourced,” i.e., having too many countable assets. The question is usually, how can we protect what we have so that my spouse does not go broke? Is it possible to legally protect assets and meet the spenddown requirements to qualify for Medicaid? In many cases, the answer is yes. The only way to know for sure is to meet with an elder law attorney.
In conclusion, many clients are surprised to learn that through the many exceptions they or a loved one can qualify for Medicaid with some simple planning. The old adage holds true, “knowledge is power!” *All rules, exceptions, and numbers in this article are as of December 2020, but will change as they do each year.