Medicare beneficiaries increasingly rely on long-term care, and the portion of seniors needing these services will keep rising as the population ages. However, long-term care is mostly not covered by Medicare. While Medicaid fills the gap in Medicare coverage for long-term care, its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.
Applicants who are seeking Medicaid long-term care benefits have to undergo a level of care assessment.
Medicaid nursing home coverage
Income limits: There is no income limit for nursing home coverage.
However, this doesn’t mean enrollees can keep all of this income. Nursing home enrollees must pay nearly all their income each month toward their care, other than a small personal needs allowance (of $50 a month) and money to pay for health insurance premiums (such as Medicare Part B and Medigap).
Assets limits: The asset limit is $5,301.85 if single and $10,603.70 if married (and both spouses are applying). If only one spouse has Medicaid, federal rules allow the other spouse to keep up to $148,620.
Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car.
Home and Community Based Services (HCBS) waivers
Every state’s Medicaid program covers community-based long-term care. Programs that pay for this type of care are called Home and Community Based Services (HCBS) waivers. Recipients of these services can live in the community, rather than entering a nursing home.
Income limits: The income limit is $1,598 a month per applicant.
Asset limits: The asset limit is $5,301.85 per applicant. If only one spouse has Medicaid, federal rules let the other spouse keep up to $148,620.
Spousal impoverishment protections in Missouri
Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits when only one spouse is applying. When this occurs, only the applying spouse’s income is counted. (Normally with Medicaid benefits, the income of both spouses is counted – regardless of who is applying.)
If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s income. This rule applies only to nursing home care and HCBS – and not other Medicaid benefits.
In Missouri in 2022, these spousal impoverishment rules allowed community spouses to keep:
Medicaid home equity limit in Missouri
Federal law requires states to limit eligibility for Medicaid nursing home and HCBS to applicants with a home equity interest below a specific dollar amount. States set these home equity levels based on a federal minimum of $688,000 and maximum of $1,033,000 in 2023.
Missouri requires Medicaid LTSS applicants to have a home equity interest of $688,000 or less.
Penalties for transferring assets in Missouri
Because long-term care is expensive, individuals can have an incentive to give away or transfer assets to make themselves eligible for Medicaid LTSS. To curb these asset transfers, federal law requires states to have a penalty period for applicants seeking Medicaid nursing home care who give away or transfer assets for less than their value. States can choose to also have a penalty period for HCBS. Medicaid will not pay for LTSS during the penalty period.
Missouri has chosen to have an asset transfer penalty for nursing home care and HCBS. This penalty period is based on a 60 month lookback period during which asset transfers and gifts are prohibited. The penalty’s length is calculated by dividing the amount of assets transferred or given away by the cost of nursing home care (and this is $6,894 a month in Missouri in 2023).
Estate recovery in Missouri
State Medicaid agencies have to attempt to recover what they paid for long-term care related expenses enrollees received beginning at age 55. States can choose to also pursue estate recovery from costs that aren’t long-term care related, and for enrollees who did not receive LTSS.
As of 2007, Missouri had chosen to pursue estate recovery for the cost of all Medicaid benefits (and not only recover from recipients of LTSS). So Missouri Medicaid (MO HealthNet) beneficiaries who are age 55 or older are subject to Medicaid estate recovery, even if they don’t use LTSS.
When Medicaid coverage was administered by a Managed Care Organization (MCO) (ie, a private insurer with which the state contracts to administer Medicaid benefits), the state will attempt to recover what it paid the MCO. That means the estate recovery amount could differ from the actual cost of Medicaid services received.
Missouri will not pursue estate recovery for enrollees who are survived by a spouse or a child who is under 21 or disabled. The state may also grant other hardship exemptions from estate recovery under specific circumstances.
