On Aug. 1, 2016, the Ohio Department of Medicaid drastically changed eligibility rules for Medicaid serving people who are disabled and people who need long-term care.
These changes will affect people at the time they need/want Medicaid coverage and make it even more important for people to think ahead about the time that they will need long-term care.
TOO MUCH INCOME
Those are weird words to write: too much income. However, in the weird world of Medicaid for long-term care, they are real. Anyone with gross income above the Special Income Level (currently, $2,199.00 per month) triggers a new requirement in Ohio’s Medicaid rules on how the so-called “excess income” must be handled each month.
Income above $2,199 must be transferred from the person’s account(s) into a separate account in the name of a Qualified Income Trust (also known as a QIT or Miller Trust).
Money in a Miller Trust must be paid out each month as part of the person’s share in his long-term care costs. The amount of money that the person spends and the amount that the person keeps are the same under the new rules as they were under the old rules.
KEEPING OR SELLING THE HOUSE
Under Ohio Medicaid’s old rules, a single person applying for Medicaid for nursing home or assisted living costs had 13 months after the beginning of eligibility during which to decide whether he couldreturn home. If unable to return home, then the Medicaid recipient had to put his house up for sale by the end of month 13. While the house was for sale, Medicaid eligibility would continue.
Under the new rules, a single person cannot automatically wait for 13 months. The person must either make a written declaration that he intends to return home, or the house must be sold.
The intent to return home ends when the person has taken up “permanent residence” somewhere other than the home in which he was living.
When the person has been in a nursing home or assisted living facility for too long (and “too long” is subject to the judgment of the Department of Medicaid), continued ownership of the home will end Medicaid coverage. The person then must sell the house and spend down the proceeds before going back on Medicaid.
Under the old rules, when a married person sought Medicaid coverage for long-term care, the combined assets of both people were counted to determine financial eligibility. (Your money counts. My money counts. Our money counts, too.)
Under the new rules, the retirement accounts (IRAs, 401Ks, 403Bs, etc.) that belong to the spouse who is not asking for Medicaid coverage are not counted as long as the couple still lives together.
Most couples in early retirement years believe that they will stay together “until death us do part,” despite the possibility of long-term care. Staying together, however, is not the reality.
Couples often find that, as they age, one of them must move into assisted living or a nursing home to get appropriate care. This new rule might induce people to hold onto retirement accounts when, for tax reasons, it might be better to spend from the retirement accounts and keep their savings outside the retirement accounts.