After the Department of Health and Welfare deems an individual eligible for Medicaid, the next question that families face is this: “What portion of the individual’s monthly income must be used to pay for their care?”
When families come in to visit with me about paying for long-term care for a loved one, the conversation often culminates in an application for Medicaid. During this initial conversation, families are narrowly focused on figuring out how to pay the high costs of facility care. After the Department of Health and Welfare deems an individual eligible for Medicaid, the next question that families face is this: “What portion of the individual’s monthly income must be used to pay for their care?”
The Department of Health & Welfare refers to the portion that the individual pays for their care as ‘patient liability’ or ‘share of cost.’ A formula, with several variables, is used by Health & Welfare to determine each individual’s countable income and resulting patient liability. For example, for a single individual in long-term care with no spouse, patient liability is determined as follows:
Income of Participant in Facility $700.00
Less AABD exclusions
Less certain deductions to income:
Aid and Attendance from VA – 290.00
Personal Needs Allowance – 40.00
Total Patient Liability
(The variables used are for the purpose of illustration only.)
This person would be required to pay to the facility $370.00 per month as a condition of his continued eligibility. Other variables which may reduce total patient liability include: the first $90 of a VA pension, a VA Aid and Attendance Allowance, and the cost of home maintenance up to $212 if the individual is likely to return home within six months.
For married couples, rather than impoverishing the spouse who remains at home, the federal government has enacted legislation which allows the at-home spouse to keep a portion of the monthly income of the spouse that is in a facility. This is called a Community Spouse Allowance and may reduce the patient liability. Let’s look at an example:
John’s medical problems require him to live in a skilled-nursing facility. His wife, Amy, is healthy and remains in the family’s home. John’s income is $3300.00 per month and Amy’s is $600.00. The couple elects the ‘community property’ method of determining ownership of income.
Income of Couple
Less AABD Income Exclusion 0.00
Less Personal Needs
Less Community Spouse Allowance 1946.00
Total Patient Liability
In this example, John would be required to pay to the facility $1914 per month to continue Medicaid eligibility.
Many different variables influence the amount an individual is required to pay. It is important that these variables are disclosed to Medicaid during the application process. Failure to do so may result in a higher share of cost. If you have questions about Medicaid, contact an Elder Law Attorney.
Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers life care planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a senior’s legal, financial or healthcare needs, please call us.