Meeting the home care qualifications
To qualify for Medicaid nursing home care, an individual can have no more than $2,000 in assets, other than a house and a car. Under the new rules, seniors also have to prove that they have not given away assets in the previous five years for less than they're worth, except to a spouse or disabled child. The old rules only looked back three years.
In determining whether to reject Medicaid applicants, the government assumes that anyone who transferred assets at less than fair market value was trying to hide them. To qualify, the senior must prove otherwise -- for example, by showing a pattern of similar giving over many years, or by providing a letter from a charity indicating the gift was solicited.
If seniors have transferred money in violation of the rules, they are denied Medicaid coverage for a penalty period. The length of the penalty is calculated by dividing the amount transferred by the average cost of nursing home care, which in Massachusetts averages $7,000 a month.
The penalty period now begins at the time of transfer, so most seniors have already served it by the time they need nursing home care. But under the new rules, the penalty would start when the senior applies for Medicaid, typically when they need immediate nursing home care.
The new rules also disqualify anyone whose house is worth more than $500,000, which is designed to force people to tap their home equity to pay for care. A state can decide to raise the cap to $750,000.
Use of annuities to shield assets is limited, since the government becomes the primary beneficiary, ahead of relatives, on some types.
Seniors will still be allowed to petition for Medicaid coverage if they believe the rules endanger their health.
ALICE DEMBNER 