Is Medicaid eligibility based only on income or are assets included too?

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cjcerny
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Is Medicaid eligibility based only on income or are assets included too?

Post by cjcerny » Tue Jul 11, 2017 7:01 am

So, I'm perplexed...I have a couple of friends (they are married to each other) who both currently have low enough incomes to apparently qualify for Medicaid. They also happen to have a home that's worth about $350k (paid for) and some land that's worth another $150k (paid for) or so. Should a couple with at least $500k in assets be able to qualify for Medicaid just because they have low incomes or are assets included in those calculations? Are they just hiding the assets somehow to defraud Medicaid?

dbltrbl
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by dbltrbl » Tue Jul 11, 2017 7:10 am

Assets are included except primary residence and a vehicle.

NotWhoYouThink
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by NotWhoYouThink » Tue Jul 11, 2017 7:15 am

For clarification, you are talking about health care, not long term custodial care, right? I think in that case in some states only income is considered.

cjcerny
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by cjcerny » Tue Jul 11, 2017 7:19 am

NotWhoYouThink wrote:For clarification, you are talking about health care, not long term custodial care, right? I think in that case in some states only income is considered.
Right--talking about health care here.

Income only seems like a stupid crazy way to determine if someone is eligible for Medicaid health care, by the way. So, if I win $5 million in the lottery and use all of that money for my one and only house, I still qualify for Medicaid health care? That just doesn't seem right. Is that accurate?

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Sheepdog
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by Sheepdog » Tue Jul 11, 2017 7:21 am

As said, state requirements are different. In my state it is recommended that a potential client apply even though you aren't sure you are eligible. So, I suggest your friends apply and not have to guess.
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cjcerny
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by cjcerny » Tue Jul 11, 2017 7:28 am

Sheepdog wrote:As said, state requirements are different. In my state it is recommended that a potential client apply even though you aren't sure you are eligible. So, I suggest your friends apply and not have to guess.
They've both already qualified. I'm just confused as to how someone with a lot of assets who is intentionally not working much any more can be eligible for Medicaid. I guess what I'm trying to come to grips with is if Medicaid eligibility is that messed up that someone like them would actually qualify or if they somehow managed to leave a few important details out of their application that Medicaid did not bother to track down, if you get my drift.

magazinewriter
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by magazinewriter » Tue Jul 11, 2017 7:43 am

I believe that in the states that expanded Medicaid, only income is looked at to obtain healthcare. BUT, I've read that the state can come after assets in the estate after death. Not sure if that is correct but it is something for your friends to explore.

deltaneutral83
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by deltaneutral83 » Tue Jul 11, 2017 7:50 am

cjcerny wrote:
They've both already qualified. I'm just confused as to how someone with a lot of assets who is intentionally not working much any more can be eligible for Medicaid.
I've been into an old folks home where Medicaid is the predominant insurer. You will want to do this once to see the level of care and see if anyone is truly gaming the system. Your friends won't be getting cutting edge treatments from the Mayo Clinic.

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TheGreyingDuke
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by TheGreyingDuke » Tue Jul 11, 2017 8:01 am

You will get an accurate answer to your question by going to your state's Medicaid site. As has been mentioned, different states deal with this differently.
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ResearchMed
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by ResearchMed » Tue Jul 11, 2017 8:03 am

NotWhoYouThink wrote:For clarification, you are talking about health care, not long term custodial care, right? I think in that case in some states only income is considered.
How does it typically differ for long term custodial care (elder LTC) vs "only" health care?

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mnnice
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by mnnice » Tue Jul 11, 2017 8:17 am

cjcerny wrote:
NotWhoYouThink wrote:For clarification, you are talking about health care, not long term custodial care, right? I think in that case in some states only income is considered.
Right--talking about health care here.

Income only seems like a stupid crazy way to determine if someone is eligible for Medicaid health care, by the way. So, if I win $5 million in the lottery and use all of that money for my one and only house, I still qualify for Medicaid health care? That just doesn't seem right. Is that accurate?
My state expanded Medicaid and has no asset test. It would work here except that the property tax on a $5 million dollars house would be 50k or about twice the Medicaid limits for two. 5 million in a collection of FDIC accounts would be better :D The system was designed that way on purpose. Asset test are expensive to administer. Also ACA was trying to provide coverage to people in their 40-50s with no or limited income and taxable to not have to pay penalties to access their tax deferred money.

Not sure how this is actionable sounds sort of jealous to me.

NotWhoYouThink
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by NotWhoYouThink » Tue Jul 11, 2017 8:22 am

For elders moving to nursing homes for LTC, when the care will be provided by Medicaid, there are asset limitations - you have to spend down your assets before you qualify for Medicaid subsidies for custodial care. Typically Medicare still pays for your medical needs during that time - if you get an infection or need heart medicine or whatever.

For people below Medicare age who are required by ACA to have insurance in states that accepted the ACA Medicaid expansion, then the qualification for Medicaid is generally income based and excludes assets. So you could be living in a $1M house and sitting on $5M in IRA investments, but if your income is below the level that state requires, you could qualify for Medicaid. The rules are complicated, but it can happen. So you can meet the ACA requirement of being insured by qualifying for Medicaid. Whether you get the health care you would like or not, or whether you can find a doctor who accepts Medicaid or not is a different question. Maybe you could get Medicaid and still pay out of pocket for concierge care, I don't know.

In any case it's like qualifying for any other means tested benefit. The rules are put in place and someone is going to find a way to do something the rule makers didn't anticipate, then the rules will change and new schemes will be developed. Aside from the fact that it may be dangerous to your health if you can't find a Medicaid provider, I don't see how this any conceptually any different from doing a Mega backdoor Roth conversion. The rules allow it and people are going to do it.

SimonJester
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by SimonJester » Tue Jul 11, 2017 8:33 am

I wonder how this works with 401k assets. Lets say you have 5Mil in your 401K but only withdraw enough to qualify as having a low income, do you then qualify for medicaid? Again I know this is state based, but do you basically have to wipe out your future retirement income to qualify for medicaid?

And why does this matter, well in some states if you do not make enough income you CANT purchase a policy on the ACA exchange and MUST go onto medicaid system.

I have two family members who have fallen into this issue, both disabled, low income, cannot just purchase an ACA policy on the state exchange and must goto medicaid. But what then when you have assets...
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by pshonore » Tue Jul 11, 2017 8:38 am

NotWhoYouThink wrote:For elders moving to nursing homes for LTC, when the care will be provided by Medicaid, there are asset limitations - you have to spend down your assets before you qualify for Medicaid subsidies for custodial care. Typically Medicare still pays for your medical needs during that time - if you get an infection or need heart medicine or whatever.

For people below Medicare age who are required by ACA to have insurance in states that accepted the ACA Medicaid expansion, then the qualification for Medicaid is generally income based and excludes assets. So you could be living in a $1M house and sitting on $5M in IRA investments, but if your income is below the level that state requires, you could qualify for Medicaid. The rules are complicated, but it can happen. So you can meet the ACA requirement of being insured by qualifying for Medicaid. Whether you get the health care you would like or not, or whether you can find a doctor who accepts Medicaid or not is a different question. Maybe you could get Medicaid and still pay out of pocket for concierge care, I don't know.

In any case it's like qualifying for any other means tested benefit. The rules are put in place and someone is going to find a way to do something the rule makers didn't anticipate, then the rules will change and new schemes will be developed. Aside from the fact that it may be dangerous to your health if you can't find a Medicaid provider, I don't see how this any conceptually any different from doing a Mega backdoor Roth conversion. The rules allow it and people are going to do it.
Medicaid spending is growing at such a rate that an asset test may be soon be necessary on the health care side. See George Will's article http://www.newsmax.com/GeorgeWill/medic ... id/800492/

DippityDoo
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by DippityDoo » Tue Jul 11, 2017 8:40 am

cjcerny wrote:They've both already qualified. I'm just confused as to how someone with a lot of assets who is intentionally not working much any more can be eligible for Medicaid. I guess what I'm trying to come to grips with is if Medicaid eligibility is that messed up that someone like them would actually qualify or if they somehow managed to leave a few important details out of their application that Medicaid did not bother to track down, if you get my drift.
Yes, Medicaid eligibility is that messed up under the Affordable Care Act. In states that expanded Medicaid, income is the sole determinant for eligibility. (See https://www.healthcare.gov/medicaid-chi ... on-and-you)

I live in a state that expanded Medicaid and had a very difficult time getting private insurance when I wasn't working in order to care for an ill relative. I got steered toward Medicaid at every turn even though I had six figures in the bank and wanted to pay for insurance privately. My experience was that there is a big push to enroll people in Medicaid. Even those who don't want it and can afford private insurance from savings.

mnnice
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by mnnice » Tue Jul 11, 2017 8:54 am

DippityDoo wrote:
cjcerny wrote:They've both already qualified. I'm just confused as to how someone with a lot of assets who is intentionally not working much any more can be eligible for Medicaid. I guess what I'm trying to come to grips with is if Medicaid eligibility is that messed up that someone like them would actually qualify or if they somehow managed to leave a few important details out of their application that Medicaid did not bother to track down, if you get my drift.
Yes, Medicaid eligibility is that messed up under the Affordable Care Act. In states that expanded Medicaid, income is the sole determinant for eligibility. (See https://www.healthcare.gov/medicaid-chi ... on-and-you)

I live in a state that expanded Medicaid and had a very difficult time getting private insurance when I wasn't working in order to care for an ill relative. I got steered toward Medicaid at every turn even though I had six figures in the bank and wanted to pay for insurance privately. My experience was that there is a big push to enroll people in Medicaid. Even those who don't want it and can afford private insurance from savings.
That is in part because it is cheaper to have you on Medicaid than to pay the premium subsidies and costs sharing of an ACA plan on the exchange. In my state non disabled adults on Medicaid average about $2000 per person in health care expenditures.

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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by skepticalobserver » Tue Jul 11, 2017 8:56 am

cjcerny wrote:land that's worth another $150k
Depending on state Medicaid regulations if this is an income producing property it might not have to be liquidated. Some or all of the net income may have to be contributed towards care and the property would probably be subject to a Medicaid lien.

DippityDoo
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by DippityDoo » Tue Jul 11, 2017 10:30 am

mnnice wrote:it is cheaper to have you on Medicaid than to pay the premium subsidies and costs sharing of an ACA plan on the exchange.
Yes, I understand some of the reasons Medicaid is heavily promoted. The problem I have with it is that it penalizes individuals with means to contribute to the cost of their healthcare outside of their monthly income. Such individuals are not eligible for subsidy and must either accept the freebie (Medicaid) or pay bloated premiums for a policy off the exchange.

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Pajamas
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by Pajamas » Tue Jul 11, 2017 10:55 am

Medicaid is administered by the states so it will vary depending on the state.

Medicaid in NY generally may or may not have resource test. It is not uncommon to have to shift back and forth from Medicaid to other coverage several times during the year depending on income and spending on health care.

https://www.health.ny.gov/health_care/m ... ttach1.pdf

But New York expanded Medicaid and that is complicated. At least some people qualify for coverage very similar to Medicaid, the Essential Plan, at a very low cost with no resource (asset) test as it is based only on MAGI income levels.

SNAP (formerly food stamps) is also based on income with no resource test but the income limits are very low.
cjcerny wrote:So, I'm perplexed...I have a couple of friends (they are married to each other) who both currently have low enough incomes to apparently qualify for Medicaid. They also happen to have a home that's worth about $350k (paid for) and some land that's worth another $150k (paid for) or so. Should a couple with at least $500k in assets be able to qualify for Medicaid just because they have low incomes or are assets included in those calculations? Are they just hiding the assets somehow to defraud Medicaid?
It may not be actual Medicaid that they have. It may also be that there is no resource test. It is unlikely they are somehow hiding real property held in their names from the government.

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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by Spirit Rider » Tue Jul 11, 2017 1:16 pm

magazinewriter wrote:I believe that in the states that expanded Medicaid, only income is looked at to obtain healthcare. BUT, I've read that the state can come after assets in the estate after death. Not sure if that is correct but it is something for your friends to explore.
I don't know why people are surprised by this. There are no asset restrictions for ordinary healthcare under the ACA. This is also true for Medicaid eligibility if the state has accept Medicaid expansion. There is no asset recovery for Medicaid for ordinary healthcare.

There are asset determinations for Medicaid nursing home payments, SNAP, TANF, etc... These are all subject to asset recovery from the state.

If you have large capital loss carryovers and/or Roth accounts, you can easily control your ACA MAGI. I have dialed mine down to get maximum ACA subsidy and cost sharing benefits. I could have easily dialed it down a little more and qualified for Medicaid, but thought that would be a little much. So I can easily see how people with significant assets (seven figures) can qualify for Medicaid.
Last edited by Spirit Rider on Tue Jul 11, 2017 1:37 pm, edited 1 time in total.

mouses
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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by mouses » Tue Jul 11, 2017 1:35 pm

cjcerny wrote:So, I'm perplexed...I have a couple of friends (they are married to each other) who both currently have low enough incomes to apparently qualify for Medicaid. They also happen to have a home that's worth about $350k (paid for) and some land that's worth another $150k (paid for) or so. Should a couple with at least $500k in assets be able to qualify for Medicaid just because they have low incomes or are assets included in those calculations? Are they just hiding the assets somehow to defraud Medicaid?
Let's say they sell both homes and rent somewhere. How long do you think two people can live on $500k? Are you looking forward to their being penniless in their old age?

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Re: Is Medicaid eligibility based only on income or are assets included too?

Post by LadyGeek » Tue Jul 11, 2017 7:35 pm

The discussion is getting contentious. Additionally, some suggestions are implying Medicaid fraud.

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