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 go through a level of care assessment.
Medicaid nursing home coverage
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying).
If only one spouse needs nursing home care, the income limit for single applicants applies – and usually only the applying spouse’s income is counted.
This income limit doesn’t mean nursing home enrollees are allowed to keep all of their income up to this limit. Instead, nursing home enrollees must pay nearly all their income toward their care, other than a small personal needs allowance (of $74 a month) and money to pay for health insurance premiums (such as Medicare Part B and Medigap).
Assets limits: The asset limit is $2,500 if single and $5,000 if married (and both spouses need Medicaid). If only one spouse has 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. A limit on home equity also applies.
Home and Community Based Services (HCBS) waiver
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. Enrollees continue living in the community, rather than entering a nursing home.
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying).
Asset limits: The asset limit is $2,500 if single and $5,000 if married (and both spouses need Medicaid). If only one spouse has Medicaid, the other spouse can keep up to $148,620.
Spousal impoverishment protections in New Hampshire
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 spouses who don’t have Medicaid to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s income (along with resource and housing allowances). This rule applies when one spouse needs Medicaid-covered LTSS, and the other spouse doesn’t receive any Medicaid benefits.
In New Hampshire in 2022, these spousal impoverishment rules allowed community spouses to keep:
Medicaid home equity limit in New Hampshire
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.
New Hampshire uses the most restrictive limit on home equity – meaning that applicants for Medicaid LTSS can’t have more than $688,000 in home equity.
Penalties for transferring assets in New Hampshire
Because long-term care is expensive, individuals can have an incentive to give away or transfer assets to make themselves eligible for Medicaid. To curb these asset transfers, federal law requires states to have a penalty period for Medicaid nursing home applicants 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 this period.
New Hampshire has chosen to have an asset transfer penalty for nursing home care and HCBS. This penalty is based on a 60-month lookback period during which time asset transfers and gifts are prohibited.
The penalty period’s length is calculated by dividing the amount of money transferred or given away by the monthly cost of nursing home care ($10,756.51 in New Hampshire in 2023).
Estate recovery in New Hampshire
A state’s Medicaid agency is required to recover the cost of long-term care related benefits received beginning at the age of 55 after an enrollee dies. States can choose to also pursue estate recovery for the cost of other Medicaid services (and for enrollees who did not receive LTSS).
New Hampshire has chosen to recover the cost of all Medicaid benefits received beginning at the age of 55. This means it will pursue estate recovery against enrollees who received Medicaid coverage for routine medical care or a hospitalization. Estate recovery applies to Medicaid expansion enrollees in New Hampshire.
When coverage was administered by an insurer, the state will attempt to recover what it paid the insurer. That means the estate recovery amount could differ from the actual cost of Medicaid services received.
New Hampshire will not pursue estate recovery if a Medicaid enrollee is survived by a spouse or a child who is under 21 or disabled. The state may also grant a hardship exemption from estate recovery under certain circumstances.
The estate recovery programs in every state attempt to recover from assets that are subject to a will (which is known as the “probate estate”). But in New Hampshire, estate recovery also applies to assets passing outside of probate. This means the state will attempt to recover from assets held in joint tenancy, life estates, living trusts and accounts with “transfer-on-death” provisions.
