Laura breathed a sigh of relief when her father, Gene, became eligible for Medicaid. He did not have any savings or a long-term care insurance policy. She wasn’t sure how long she could keep paying nursing home bills. However, Laura learned that her job was not over when it came to Gene’s Medicaid. Every month, she needed to make sure to keep his income within Medicaid’s resource limits.
What are Medicaid’s resource limits?
Applicants must meet certain requirements, or resource limits, before becoming eligible for Medicaid. For example, an applicant cannot receive monthly income exceeding a set amount. In 2018, the income level is $2,025 although that may be adjusted annually for inflation.
Medicaid recipients must not have more than $2,000 in resources on the first day of the month. “Resources” may be:
- Cash,
- Bank Accounts,
- Cash value of life insurance, and
- investment income.
Every month, Laura worries that her dad’s Social Security check will be deposited in his bank account before the first of the month. This might put his resources over the limit. Also, he has some small investments that pay quarterly dividends. These may also cause problems with his Medicaid eligibility.
What steps can I take to stay within Medicaid’s resource limits?
First, learn what those limits are, because not every asset counts toward resource limits. We’ve listed some of the assets that are considered resources. The following assets are generally not included as resources:
- Household goods and personal effects,
- Burial plans,
- One car if used by the recipient’s family member, and
- Certain real property.
Please note that resource limits differ for married Medicaid recipients.
In Gene’s case, he is single. He has a checking account, a car, his Social Security benefits, and a small retirement account. Gene does not own any real property or any cash value life insurance policies. Laura is using his car now that he is no longer able to drive.
Every month, Laura watches Gene’s bank account. She knows that an unexpected quarterly dividend or interest payment could jeopardize Gene’s Medicaid benefits. As the first of the month approaches, she can pay the nursing home in advance or other bills to reduce his checking account balance.
Another option is for Laura to have an attorney set up a Qualified Income Trust, also known as a Miller Trust. Gene’s excess income, anything over the resource limit, could be deposited directly into his Miller Trust. The trustee could then use the funds for Gene’s nursing home bills and personal items.
Don’t Lose Your Medicaid Benefits.
The attorneys at Miller Estate and Elder Law use their experience and skills to assist their clients with Medicaid questions and concerns. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form to let us know you are ready to get started. You can also check out the free resources on our website. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
