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.
Medicaid nursing home coverage
Income limits: The applicant’s income must be less than the cost of nursing home care. Usually only the income of the spouse who needs nursing home care is counted.
However, 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 $2,000 if single and $4,000 if married (and both spouses are applying). If only one spouse requires Medicaid, the other spouse can keep up to $148,620.
Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car. Enrollees also can’t have more than $688,000 in home equity.
Home and Community Based Services (HCBS) waivers
Every state’s Medicaid program covers community-based long-term care services. Programs that pay for this care are called Home and Community Based Services (HCBS) waivers. Recipients continue living in the community, rather than entering a nursing home.
Income limits: The income limit is $914 a month if single. If a married couple is applying, the combined income limit is $1,828 a month (each spouse is allowed up to $914 a month).
Asset limits: The asset limit is $2,000 if single and $4,000 if married (and both spouses are applying). If only one spouse requires Medicaid, the other spouse can keep up to $148,620. HCBS enrollees can’t have more than $688,000 in home equity.
Spousal impoverishment protections in Montana
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.)
Spousal impoverishment rules allow community spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income.
In Montana in 2022, these spousal impoverishment rules allowed community spouses to keep:
Medicaid home equity limit in Montana
Federal law requires states to limit eligibility for Medicaid nursing home care 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.
Montana requires applicants for Medicaid LTSS to have no more than $688,000 in home equity.
Penalties for transferring assets in Montana
The high cost of long-term care means that some individuals attempt to “impoverish themselves” by giving away or transferring assets to qualify for Medicaid. To curb these asset transfers, federal law requires states to have a penalty period for applicants for Medicaid nursing home care who give away or transfer assets for less than their value. States can also have an asset transfer penalty for HCBS. Medicaid will not pay for LTSS during this period.
Montana has chosen to have an asset transfer penalty for nursing home care and HCBS. This penalty is based on a 60-month lookback period prior to receiving Medicaid (or entering a nursing home). The length of the penalty is calculated by dividing the amount of money transferred or given away by the cost of nursing home care (which is $271.47 a day in Montana in 2023).
Estate recovery in Montana
A state’s Medicaid agency is required to recover what it paid for long-term care related costs while an enrollee was 55 or older. States can choose to also pursue estate recovery for costs that are unrelated to LTSS (and for enrollees who didn’t receive LTSS). This is called estate recovery.
Montana has chosen to recover the cost of all Medicaid benefits paid for enrollees beginning at the age of 55. This means the state pursues estate recovery against enrollees who did not receive LTSS. However, the state does not use estate recovery to recoup costs for Medicaid expansion enrollees. This is important, as Montana expanded Medicaid under the ACA as of 2016, and more than 86,000 people — including many who are 55 or older — were enrolled under the expanded eligibility guidelines as of August 2020.
When an enrollee’s 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 be more (or less) than the actual cost of Medicaid services received. This means the state might pursue large recoveries from enrollees who used little medical care.
Montana appears to delay its estate recovery for enrollees who are outlived by a spouse or a child who is under 21 or disabled. The state would recover from the estate once the spouse died, or the child turned 21 (or was no longer considered disabled).
The state may also grant a hardship exemption from estate recovery under certain other circumstances.
