Social Security Income and Medicaid Eligibility - Planning Question

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Topic Author
teelainen
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Social Security Income and Medicaid Eligibility - Planning Question

Post by teelainen » Wed May 15, 2019 3:58 pm

Scenario:
- Wife is 65 years old and is currently collecting about $1,000 per month in Social Security benefits.
- Husband is 67 years old and is eligible to collect $1,700 per month in Social Security benefits if he wants to apply right now.
- If the husband decides to apply now at age 67, they will get a total of about $33,000 per year in Social Security benefits.
- If the husband decides to wait until age 70 before applying, they will get a total of about $43,000 per year in Social Security benefits.
- They have no other sources of income right now besides what is mentioned above.
- However, they don't need any income right now. They are living with relatives and 100% of their living expenses are paid for.
- They want to pick the option that gives them the best chances of being eligible for Medicaid (healthcare for low income people) in the future.
- They do have Medicare, but they believe Medicaid is better in the long run because it can cover the cost of nursing homes, assisted living facilities, and other long-term care alternatives (since the couple can't live with their relatives forever).

Question:
Will they have a better chance of being eligible for Medicaid if the husband applies for Social Security Benefits now at age 67 instead of age 70 ? (because applying at age 67 gives them a lower yearly income of $33,000 vs. the $43,000 per year if he applies at age 70).

However, if their chances of qualifying for Medicaid are the same whether their yearly income is $33,000 or $43,000, then they would rather just wait until the husband is 70 years old to apply for Social Security. Also, if they do wait until the husband is 70 before applying for Social Security, they would also have the husband apply for spousal benefits right now.
Last edited by teelainen on Wed May 15, 2019 4:29 pm, edited 1 time in total.

Silk McCue
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by Silk McCue » Wed May 15, 2019 4:24 pm

Are you saying the don’t have Medicare now? If not, why not. If so, then why do they care about Medicaid.

Please provide more information on why they have this concern/question.

Cheers

Topic Author
teelainen
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by teelainen » Wed May 15, 2019 4:29 pm

Silk McCue wrote:
Wed May 15, 2019 4:24 pm
Are you saying the don’t have Medicare now? If not, why not. If so, then why do they care about Medicaid.

Please provide more information on why they have this concern/question.

Cheers
Silk McCue, they do have Medicare, but they believe Medicaid is better in the long run because it can cover the cost of nursing homes, assisted living facilities, and other long-term care alternatives (since the couple can't live with their relatives forever).

Silk McCue
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by Silk McCue » Wed May 15, 2019 5:24 pm

teelainen wrote:
Wed May 15, 2019 4:29 pm
Silk McCue, they do have Medicare, but they believe Medicaid is better in the long run because it can cover the cost of nursing homes, assisted living facilities, and other long-term care alternatives (since the couple can't live with their relatives forever).
They have a fundamental misunderstanding of how Medicare and Medicaid work including what Medicaid will take care of and when. They also do not understand how they can qualify for Medicaid if they need it even with $43,000 of joint SS Income (Google “Miller Trust”). The husband absolutely needs to wait until 70 until he takes SS to provide for them for possibly a decade or two before one of them would (MAYBE) have a need that Medicaid would cover. Trust me, with no/limited assets and that income they will qualify.

If they aren’t both working now they need to get jobs to have money to spend now if needed and to save for the future that can be protected for the use of the well spouse if one becomes incapacitated and needs to go into a nursing home down the line.

Taking SS now will only cause great harm to their financial future.

I suggest you research what it takes to qualify for Medicaid in the state they live and how much in assets and income the well spouse can keep. Also research what and when Medicaid would cover.

Cheers

mnnice
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by mnnice » Wed May 15, 2019 5:30 pm

If they just have $1000 of income they are probably eligible for both Medicare and Medicaid which would basically be like free Medigap coverage. With both people collecting they would appear over the income limit for dual eligibility in both the 67 and 70 scenarios.

If they really have zero assets and one or both of them needs skilled care then the person needing the skilled care would most likely transition to Medicaid. They still get Medicare the long term care would be paid out of that persons social security and the balance would be paid by Medicaid. The other person called the community spouse would have to figure out how to subsist on just his or her check.


These are generalities but that is the idea. With what you have presented it’s kind of hard to tell which social security strategy makes more sense.

Spirit Rider
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by Spirit Rider » Wed May 15, 2019 5:37 pm

I agree, you have a fundamental understanding of Medicaid. Institutional Medicaid for long term care is totally separate from basic Medicaid.

I haven't looked at the rules recently, but in my mother's case. She had to have < $1500 in assets, her Social Security benefits we're paid to Medicaid, who paid her Medigap premiums, the nursing home costs and she received just $50/month in spending money.

Not being able to live with relatives is not a determination to be eligible for Institutional Medicaid.

The Wizard
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by The Wizard » Wed May 15, 2019 5:52 pm

Spirit Rider wrote:
Wed May 15, 2019 5:37 pm
I agree, you have a fundamental understanding of Medicaid...
Understanding or Misunderstanding?
Attempted new signature...

JoeRetire
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by JoeRetire » Wed May 15, 2019 6:00 pm

teelainen wrote:
Wed May 15, 2019 3:58 pm
- They want to pick the option that gives them the best chances of being eligible for Medicaid (healthcare for low income people) in the future.
So they want to be as poor as possible.

Choose the social security claiming dates that give them the lowest possible monthly benefit. Take as much retroactive money as they are allowed. And spend it all - don't save any of it.

And make sure they spend all of their saved assets.

Oh, and they should move to a state with generous Medicaid rules.

Topic Author
teelainen
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by teelainen » Thu May 16, 2019 12:07 am

Silk McCue wrote:
Wed May 15, 2019 5:24 pm
They have a fundamental misunderstanding of how Medicare and Medicaid work including what Medicaid will take care of and when. They also do not understand how they can qualify for Medicaid if they need it even with $43,000 of joint SS Income (Google “Miller Trust”). The husband absolutely needs to wait until 70 until he takes SS to provide for them for possibly a decade or two before one of them would (MAYBE) have a need that Medicaid would cover. Trust me, with no/limited assets and that income they will qualify.
Silk McCue, so if they have no/limited assets and $43,000 of yearly joint income, you think they can still qualify for Medicaid?

123
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by 123 » Thu May 16, 2019 12:45 am

Medicaid eligibility is generally dependent on income and assets and varies by state.

Assuming they have no ownership interest in any assets that could impact eligibility their best strategy could be to get their income as low as possible. To do that on a long term basis they should take any and all social security benefits as soon as possible to get the lowest possible monthly income.

Medicaid programs generally have "look back" provisions that evaluate income and assets over some pre-determined period of time prior to being eligible for Medicaid,

Their options for medical care and treatment can be significantly limited in many parts of the country if they are covered by Medicaid. In many parts of the country there are free or low cost Medicare Advantage programs that can allow significantly higher care level/options for individuals eligible for Medicare.

They should check in the areas they live, and plan to live in, to determine under what circumstances they could qualify for Medicaid. There are some states, like Texas, where Medicaid is either not available or their income may preclude assistance .

Federal legislation can significantly impact Medicaid since it is funded by the Federal government. With future legislative changes likely/possibly impacting Medicaid it is difficult to determine if Medicaid will become more difficult to qualify for. It is possible that actions that people take to qualify for Medicaid under current rules could turn out to be disadvantageous in the future due to legislative changes.
The closest helping hand is at the end of your own arm.

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BL
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by BL » Thu May 16, 2019 2:22 am

If Medicaid income is determined by a 1040 tax return (not sure, but a good guess), SS may or may not show up on income at all or very little of it might be there. I think you need a tax estimator or tax program to try out the numbers.

Kiplinger says:
To determine the percentage, calculate your "provisional income," which is your adjusted gross income (not counting Social Security benefits), plus any nontaxable interest and half of your Social Security benefits. If that total is less than $25,000 if you're single or $32,000 if married filing jointly, your Social Security benefits are not taxable. If it's between $25,000 and $34,000 on a single return or $32,000 to $44,000 on a joint return, then up to 50% of your Social Security benefits may be taxable. If your provisional income is more than $34,000 on a single return or $44,000 on a joint return, 85% of your benefits may be taxable.

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celia
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by celia » Thu May 16, 2019 3:00 am

My understanding of Medicaid is minimal, but I understand that even if you are eligible, not many doctors take it and you have to wait a longer time to see a doctor. You would be competing with the other Medicaid people in your area for a limited pool of providers and health care facilities.

Silk McCue
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by Silk McCue » Thu May 16, 2019 7:09 am

teelainen wrote:
Thu May 16, 2019 12:07 am
Silk McCue wrote:
Wed May 15, 2019 5:24 pm
They have a fundamental misunderstanding of how Medicare and Medicaid work including what Medicaid will take care of and when. They also do not understand how they can qualify for Medicaid if they need it even with $43,000 of joint SS Income (Google “Miller Trust”). The husband absolutely needs to wait until 70 until he takes SS to provide for them for possibly a decade or two before one of them would (MAYBE) have a need that Medicaid would cover. Trust me, with no/limited assets and that income they will qualify.
Silk McCue, so if they have no/limited assets and $43,000 of yearly joint income, you think they can still qualify for Medicaid?
Yes. I don't think you Googled Miller Trust if you are asking this? Please take a look at this page.

https://www.hg.org/legal-articles/what- ... rust-45532

A portion of their income will still go to pay for their care but a Miller Trust is a standard tool in getting folks qualified for Medicaid. Taking SS now instead of 70 will leave fewer dollars available for the well spouse to survive on. It is a huge mistake to intentionally decrease their guaranteed income when neither of them many ever need to go on Medicaid since there are legal tools to get them qualified.

Medicaid is only going to take over from Medicare if they need long term care due to meeting mental or physical need requirements as defined by the program. If they are homeless and and don't meet the those requirements Medicaid isn't going to take care of them. They need to focus on maximizing income including getting jobs. They are ONLY 65 and 67 for goodness sake. Unless they are unable to do work they need to do so. Their attitude needs to change by 180 degrees to focus on self sufficiency and not focused on how can we qualify for Medicaid.

If they ever need the services of Medicaid given the incomes we are discussing any halfway competent Elder Law Attorney will make that happen in a heartbeat. They need to stop thinking about this and START LIVING for the future.

Cheers

NotWhoYouThink
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by NotWhoYouThink » Thu May 16, 2019 7:49 am

They need to develop a better understanding of how Medicare and Medicaid work together for people who need or may need long term care.

Medicare covers their health care after they turn 65, and there is no reason at all to avoid Medicare coverage in favor of Medicaid with their level of available income. More doctors and hospitals will treat them if they have Medicare, and they have a lot more control of which plan (Medicare Advantage, Medigap) they choose, and what their potential costs and co-payments will be. It's the best deal going.

If they need long term residential/maintenance care, Medicare won't cover that. Medicare will cover short term nursing home care for rehab following a hospitalization, but only for a maximum of 100 days after a hospitalization. After that, you are on your own, you have to pay for your own care out of your own pocket. Your kids don't have to pay (even though some states have some filial responsibility laws on the books, the details make this not an issue in the overwhelming number of cases), but if you have any assets those have to be spent before you qualify for Medicaid.

That's the only time they should be worrying about Medicaid. Not Not Not for regular medical care while they are otherwise able to live independently or with family. Only when they need long term residential/maintenance care that they do not have the money to pay for. This kind of care can range from $5K-$15K per month depending on their location and their needs, so few can afford it for very long. If they need that, they apply for it at that time, and demonstrate that they don't have any assets and little income, and that they didn't suddenly become broke because they gave away all their money and assets in the last 5 years. Once they demonstrate all of that, then Medicaid takes over the bills from the nursing home, but the nursing home also gets to keep most of their SS payment.

mnnice
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by mnnice » Thu May 16, 2019 7:53 am

BL wrote:
Thu May 16, 2019 2:22 am
If Medicaid income is determined by a 1040 tax return (not sure, but a good guess), SS may or may not show up on income at all or very little of it might be there. I think you need a tax estimator or tax program to try out the numbers.

That’s not how it works.

You fill out forms stating your income sources. The income is verified. Whether or not the income is subject to tax is not material. Back to my statement that they probably are dual eligible for Medicare and Medicaid presently and that they will not be is the other parent claims social security.

dbr
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by dbr » Thu May 16, 2019 7:59 am

It might be the best thing is to visit the local county social services office who have the staff there discuss the ins and outs of public assistance for persons with no assets and limited income in that state. These would be the people who actually administer Medicaid. This can include both supported living facilities and in-home care to the extent available in the state. In some states the key words are "elderly waiver."

Another source of information would be staff at assisted living or nursing facilities who deal with accepting clients under Medicaid support.

Medical care for people living at home unassisted is a different thing, but the social services contact should be similar.

In my experience some counties have excellent staff and some seem blatantly incompetent and non-responsive. Good luck.

Silk McCue
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by Silk McCue » Thu May 16, 2019 8:10 am

mnnice wrote:
Thu May 16, 2019 7:53 am
BL wrote:
Thu May 16, 2019 2:22 am
If Medicaid income is determined by a 1040 tax return (not sure, but a good guess), SS may or may not show up on income at all or very little of it might be there. I think you need a tax estimator or tax program to try out the numbers.
That’s not how it works.

You fill out forms stating your income sources. The income is verified. Whether or not the income is subject to tax is not material. Back to my statement that they probably are dual eligible for Medicare and Medicaid presently and that they will not be is the other parent claims social security.

You are wrong regarding being approved for Medicaid with the higher level of income. A Miller Trust will be used to deal with this issue. PLEASE Google that and learn how it works before telling someone to cripple their future incomes when they may NEVER need Medicaid. Or, take a look at this link I provided earlier this morning.

https://www.hg.org/legal-articles/what- ... rust-45532

Cheers

dbr
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by dbr » Thu May 16, 2019 8:21 am

Silk McCue wrote:
Thu May 16, 2019 8:10 am
mnnice wrote:
Thu May 16, 2019 7:53 am
BL wrote:
Thu May 16, 2019 2:22 am
If Medicaid income is determined by a 1040 tax return (not sure, but a good guess), SS may or may not show up on income at all or very little of it might be there. I think you need a tax estimator or tax program to try out the numbers.
That’s not how it works.

You fill out forms stating your income sources. The income is verified. Whether or not the income is subject to tax is not material. Back to my statement that they probably are dual eligible for Medicare and Medicaid presently and that they will not be is the other parent claims social security.

You are wrong regarding being approved for Medicaid with the higher level of income. A Miller Trust will be used to deal with this issue. PLEASE Google that and learn how it works before telling someone to cripple their future incomes when they may NEVER need Medicaid. Or, take a look at this link I provided earlier this morning.

https://www.hg.org/legal-articles/what- ... rust-45532

Cheers
Good. And the first thing to notice in that article is whether one is in a spend down state or an income cap state. I have dealt with this Medicaid process for a family member but we are in a spend down state, which explains why Miller Trust never got on our radar.

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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by BarbBrooklyn » Thu May 16, 2019 8:33 am

I want to back up here.....

What are the circumstances that have led this elderly couple to become so impoverished that they have only SS and are reliant on living with a relative (that will get old really fast)?

I would look into if they are eligible for low income housing if they are independent in their living skills, supportive housing if they are not, food stamps and other social service supports. Are they eligible for SSI or SSDI? They might be "dual eligible" for Medicare and Medicaid right now.

How are they paying their Medicare premiums or are they getting assistance with that? Do they have part B, part D?

It behooves whomever is helping them to get them to someone (social worker, County social services, pro bono eldercare attorney or law school legal clinic) who understands the system to get them what they need/are eligible for in terms of support.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

mnnice
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by mnnice » Thu May 16, 2019 8:37 am

Silk McCue wrote:
Thu May 16, 2019 8:10 am
mnnice wrote:
Thu May 16, 2019 7:53 am
BL wrote:
Thu May 16, 2019 2:22 am
If Medicaid income is determined by a 1040 tax return (not sure, but a good guess), SS may or may not show up on income at all or very little of it might be there. I think you need a tax estimator or tax program to try out the numbers.
That’s not how it works.

You fill out forms stating your income sources. The income is verified. Whether or not the income is subject to tax is not material. Back to my statement that they probably are dual eligible for Medicare and Medicaid presently and that they will not be is the other parent claims social security.
You are wrong regarding being approved for Medicaid with the higher level of income. A Miller Trust will be used to deal with this issue. PLEASE Google that and learn how it works before telling someone to cripple their future incomes when they may NEVER need Medicaid. Or, take a look at this link I provided earlier this morning.

https://www.hg.org/legal-articles/what- ... rust-45532


Cheers
I am talking about right now. They are probably eligible for Medicaid as we speak (dual with Medicare). I know the rules and limit for long term Medicaid are calculated differently. It’s also incredibly complicated and varies greatly by state. I do know how regular Medicaid works and what documentation is needed tax forms are not required, Some people that qualify wouldn’t have tax forms.

I never said anything about social security claiming strategy! I am not sure the OP ever gave us enough relevant info to make a useful judgement about that.

dbr
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by dbr » Thu May 16, 2019 8:39 am

BarbBrooklyn wrote:
Thu May 16, 2019 8:33 am
I want to back up here.....

What are the circumstances that have led this elderly couple to become so impoverished that they have only SS and are reliant on living with a relative (that will get old really fast)?

I would look into if they are eligible for low income housing if they are independent in their living skills, supportive housing if they are not, food stamps and other social service supports. Are they eligible for SSI or SSDI? They might be "dual eligible" for Medicare and Medicaid right now.

How are they paying their Medicare premiums or are they getting assistance with that? Do they have part B, part D?

It behooves whomever is helping them to get them to someone (social worker, County social services, pro bono eldercare attorney or law school legal clinic) who understands the system to get them what they need/are eligible for in terms of support.
Absolutely. By experience I know there are a lot of components to situations like this and you have to start with all the different agencies and resources in your area to work through the maze. Maze, by the way, is an understatement. Also, a lot of this can feel very intrusive, but in spite of that my experience is that the people who work in various functions in social services really are one's friends. An important question is how healthy are they or are there conditions that qualify as disabilities. There is also the concept of "vulnerable adult" to take into account.

Silk McCue
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Re: Social Security Income and Medicaid Eligibility - Planning Question

Post by Silk McCue » Thu May 16, 2019 8:46 am

mnnice wrote:
Thu May 16, 2019 8:37 am
I am talking about right now. They are probably eligible for Medicaid as we speak (dual with Medicare). I know the rules and limit for long term Medicaid are calculated differently. It’s also incredibly complicated and varies greatly by state. I do know how regular Medicaid works and what documentation is needed tax forms are not required, Some people that qualify wouldn’t have tax forms.

I never said anything about social security claiming strategy! I am not sure the OP ever gave us enough relevant info to make a useful judgement about that.
Got it. Thanks.

Cheers

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