Pennsylvania, like most states, including New Jersey, maintains a Medicaid Program which is a jointly funded state and federal health care program for low-income individuals of all ages, but specifically Pennsylvania residents aged 65 and over who require long term care in either a nursing home, an assisted living center, or at home.
The Type of Medicaid Programs
There are several Medicaid long term care programs which have different eligibility requirements and benefits. These programs and eligibility differ but are categorized in the following areas:
- Institutional/nursing home Medicaid—this entitlement program is applicable to anyone who is eligible but is only provided in the nursing home settings.
- Medicaid home and community-based services—this program is limited and there may be a wait list for these services which are provided in the home, through adult day care, or assisted living.
- Regular Medicaid/Aged, Blind, & Disabled—this is an entitlement program which is provided at home or through the adult day care program provided that the person meets the requirements.
Each program maintains a specific income and asset threshold which the applicant must meet to qualify for the program. The threshold requirements are stated in the following chart:
What does Medicaid define as “income”?
Income can come from many sources which includes the following
- employment wages,
- social security disability,
- social security income,
- IRA withdrawals,
- stock dividends.
If only one spouse of a married couple is applying for Medicaid benefits, only the income of that applicant spouse is counted; the income for the non-applicant spouse is irrelevant for nursing home- and home-based services. In addition, there is a minimum monthly maintenance needs allowance (MMMNA) which is also sometimes called the community spouse monthly maintenance needs allowance.
This is the minimum amount of monthly income to which the non-applicant spouse is entitled for living costs such as rent/mortgage and utility costs. Currently, the maximum allowance is $3,259.50. Allowance allows the Medicaid applicant to transfer income to the non-applicant spouse to insure he/she has sufficient funds to which to live. This is sometimes called the spousal impoverishment rule.
What does Medicaid count as an asset?
Countable assets for the purposes of Medicaid eligibility include the following
There are, however, many assets which are exempt (non-countable). Pennsylvania, for example, allows an extra $6,000 exemption in addition to the asset limit for a total of $8,000 but if the applicant has income more than the monthly limit ($2,382) the total asset limit for Medicaid purposes to the applicant is $2,400. In other words, for the applicant to have an $8,000 limit as opposed to a $2,400 limit, his/her income must be under $2,382 per month.
Exempt assets include the following:
- Personal belongings
- Household items
- One vehicle
- Irrevocable burial trust
- The applicant’s primary home (if the applicant lives in the home and his/her equity interest is not greater than $603,000)
- There are 2 exceptions to the home exemption—single applicant who does not live in the home but communicates “an intent to return” and a married applicant who has a spouse who lives in the home.
Community Spouse Assets
In 2021 the community spouse (non-applicant) can retain ½ of the couples’ joint assets, up to a maximum $130,380. In addition, if the couples’ total assets are $26,076 or less, the community spouse is entitled to 100% of it. This is often referred to the community spouse resource allowance.
5 year Look Back Period
Pennsylvania, like New Jersey, maintains a 5 year look back period. This means that 5 years immediately preceding someone’s Medicaid application, the program will check to make sure no assets were sold or given away under fair market value. If this rule was violated the government assumes that it was done to qualify for Medicaid’s asset limit. This violation will result in a penalty period which makes the applicant ineligible for benefits until the amount of the transfer (value) is spent by the applicant on services that Medicaid would otherwise cover.
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