Medical Assistance Long Term Care Benefits

In Pennsylvania, Medicaid (a federal program administered the U.S. Department of Health and Human Services) is known as “Medical Assistance”. Pennsylvania Medical Assistance is managed by the PA Department of Human Services through local County Assistance Offices based on regulations outlining eligibility and procedures established by state law. Generally, Medical Assistance benefits are payable for someone’s care (provided they otherwise qualify medically) when one has less than $2,400.00 of assets (but may be up to $8,000.00 in assets under certain circumstances). Long-term care services include both Home and Community-Based Services and long-term care facilities (also known as nursing facilities).

So what happens when Mom or Dad enters a nursing home? Typically, a resources assessment form is completed (a “snapshot” of all assets) to detail and determine all available resources owned by both spouses, either individually or jointly. Available resources include all assets owned by the spouse entering the nursing home (called the “Institutionalized Spouse”) and all assets of the spouse not entering the nursing home (called the “Community Spouse”). Available resources include everything that is not specifically excluded and includes such things as cash, checking and savings accounts, stocks, bonds, mutual funds, CDs, and all other assets whether owned individually or together.

Certain resources, however, are specifically excluded from consideration:

  • Marital residence (value cap may apply)
  • Household goods and personal effects
  • One motor vehicle
  • Life insurance policies up to a maximum aggregate face value of $1,500.00
  • All term life insurance which has no cash value
  • Burial plots and an irrevocable burial reserve (limited to about $14,000.00 in Lehigh County for 2018)
  • Community Spouse’s IRA/401(k)
  • Community Spouses Resources Allowance (now up to 50% of the otherwise available assets capped at $123,600.00 for 2018).

Other than the above excluded assets, everything else is deemed available to pay for the Institutionalized Spouse’s care in a nursing home.

Let’s look at an example: John, age 74, and Mary, age 70, are married. John has Parkinson’s that has progressed and has been deemed nursing facility clinically-eligible while Mary lives at home.

John and Mary’s Total Assets:

Primary Residence (Mortgage: $30,000) $250,000
Bank Accounts, Mutual Funds, Stocks, & Bonds $250,000
John’s 401k $100,000
Mary’s IRA $50,000
2010 Honda Accord  
Household belongings $10,000
John’s Term Life Insurance $0 cash value ($100,000 death benefit)
Mary’s Term Life Insurance $0 cash value ($100,000 death benefit)
John’s Whole Life Insurance $15,000 cash value ($150,000 death benefit)
TOTAL ASSETS $675,000

 

John and Mary’s Excluded Assets:

House (marital residence) $250,000
Mary’s IRA $50,000
2010 Honda Accord  
Household belongings $10,000
John’s Term Life Insurance $0 cash value ($100,000 death benefit)
Mary’s Term Life Insurance $0 cash value ($100,000 death benefit)
TOTAL EXCLUDED ASSETS $310,000

 

John and Mary’s Counted Assets:

Joint Bank Accounts, Mutual Funds, Stocks, & Bonds $250,000
John’s 401k $100,000
John’s Whole Life Insurance $15,000 cash value ($150,000 death benefit)
TOTAL COUNTABLE ASSETS $365,000

 

Calculating Mary’s Community Spouse Resource Allowance (CSRA):

Countable Assets divided by two: $365,000/2 = $182,500. However, can’t protect more than a maximum of $123,600.00 (2018 CSRA maximum).

Determining John and Mary’s Assets available for John’s Nursing Home Care:

$365,000 (Countable Assets) – 2,400 (Resource Allowance) – 123,600 (CSRA) = $239,000 available to pay for John’s nursing home care. The analysis also will require a review of John and Mary’s income and there may be means to further spend down otherwise available assets but those topics are beyond the scope of this blog. Nevertheless, we hope you find this information and the example helpful.

If you have questions about Medical Assistance and nursing home planning, contact the Estate Planning Group at Gross McGinley and we will be happy to answer your questions and provide you with advice and direction based on your individual situation and goals.


Attorney Thomas A. Capehart provides guidance on wills, estate planning, real estate, and elder law matters.