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Helmut Schmidt and Dave Olson, Published June 21 2010

Medicaid and long-term care go hand in hand

During a recent month, nearly 4,000 people received long-term care in North Dakota who were on Medicaid assistance, according to Curtis Volesky, director of the Medicaid Eligibility Unit for the North Dakota Department of Human Services.

The numbers are due in large part to the cost of long-term care, particularly in a nursing-home type of facility, which in North Dakota averages about $5,948 per month, Volesky said.

In Minnesota, Medicaid figures the average monthly cost of nursing-home care to be about $5,000.

Because many people won’t have the monthly income in retirement to pay for nursing-home care, Volesky suggests that those who can afford it and who have assets they wish to shield consider buying long-term care insurance.

He also advised people to contact their county social services offices to find out where they stand in terms of qualifying for Medicaid to help pay for long-term care, as well as what other programs are available to help individuals and families.

A basic qualification for Medicaid is that an individual have no more than $3,000 worth of assets.

“Once they get around $4,500 to $5,000, then it’s time to apply,” said Kim Trudell, a financial worker for Clay County Social Services.

Trudell said taking that step is difficult for many.

“These elderly come in with so much pride. It’s hard for them. They’ve worked hard all their lives,” she said.

“Sometimes by the time they come in for help, they have gone through all their money.

“I cry with my clients every day,” Trudell said.

Qualifying for aid

A single person applying for Medicaid for nursing-home care is allowed $3,000 in assets.

For couples, the amount is $6,000 in assets.

If one spouse enters a nursing home and the other remains at home in the community, the “community spouse” is allowed to keep considerably more assets.

In North Dakota, the community spouse is allowed a minimum of $21,912 to a maximum of about $109,560.

In Minnesota, the minimum is $31,094 and the top limit is the same as North Dakota, $109,560.

Significant assets can be exempted from the calculation, such as a house (if certain people, such as a spouse are living in it), a vehicle, and tools for practicing a trade.

How assets are spent in years leading up to when someone applies for aid can play a big role in whether someone qualifies for assistance.

A person can’t simply give assets to a family member to avoid having the asset count toward what must be paid toward long-term care.

Look-back period

Volesky said there is a five-year look-back period in federal law.

If asset transfers made during that period can’t be justified, the monetary value of the asset is calculated and Medicaid assistance for long-term care can be withheld for months or years.

The ineligibility period, measured in months, is figured by totaling up the dollar amount of assets that were transferred or given away and dividing that number by the monthly cost of nursing-home care for the state involved.

For example, if a person living in North Dakota gave away $80,000 in assets, that amount would be divided by $5,948, and the person would be ineligible for aid for 13 months.

The penalty period can be shortened if assets are returned.

“We do see those situations,” Volesky said.

More assets can be kept if a person has a long-term care insurance plan called a partnership policy, Volesky said. In that case, for example, if insurance pays $250,000 before Medicaid kicks in, a person can keep a larger share of assets to be distributed to their heirs when he or she dies, he said.

Trudell said if people start planning early enough, they can be counseled on how to spend down assets in ways that won’t penalize them when it comes to apply for assistance.

For example, the cost of modifying a home to make it handicap accessible isn’t counted.

“We’ve had some clients put a ramp in their front yard to get the spouse home. We’ve had clients who will get a handicap-accessible van,” Trudell said.

Coming clean

Janet Halvorson, a financial worker for Clay County Social Services, said when people apply for Medicaid and are asked if they have made asset transfers in recent years, they typically aren’t required to back up their answers with documentation.

“We ask ’em, and if they don’t tell us, we just have to assume there wasn’t one (a transfer). But if down the road we find out there was, then we would look at fraud,” Halvorson said.

She added that long before the need arises for long-term care, seniors can make things easier for their children by sharing financial information with their kids earlier in the process rather than later.

“I really feel that the elderly should let their children know what their financial situation is ahead of time,” Halvorson said. “Otherwise, the children really struggle when they’re trying to figure it out.”

In Minnesota, a long-term care screening is usually done to determine whether someone applying for Medicaid really needs nursing-home care, said Teryl Clausen, a long-term care consultant and social worker for Clay County Social Services.

“Minnesota really wants to keep people out of nursing homes that don’t need to be there, partly because of the cost and partly because we know there are other options that can do as well if given a chance,” Clausen said.

Medicaid facts and figures

Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583