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As a Medicare beneficiary, where you live – meaning your state of residence – can have a significant impact on the care that you receive and how you pay for that care during your “golden years.” This page explains how New Jersey’s regulations and policies are likely to affect your bottom line.
Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for help through a Medicare Savings Program (MSP). In New Jersey, these programs pay for Medicare Part B premiums, Medicare Part A and B cost-sharing, and – in some cases – Part A premiums.
MSP asset limits: New Jersey uses the federal asset limits for QMB, SLMB and QI – which are $9,090 if single and $13,630 if married.
Medicare covers a great number of services – including hospitalization, physician services, and prescription drugs – but Original Medicare doesn’t cover important services like vision and dental benefits. Some beneficiaries – those whose incomes make them eligible for Medicaid – can receive coverage for those additional services if they’re enrolled in Medicaid for the aged, blind and disabled (ABD).
In New Jersey, Medicaid ABD covers extensive dental benefits. Medicaid ABD will also cover a new pair of eyeglasses each year for enrollees ages 60 or older whose prescription changes.
Income eligibility: The income limit is $1,215 a month if single and $1,644 a month if married.
QMB has the same income limit as Medicaid ABD. This means QMB applicants who also meet Medicaid’s more restrictive asset limit receive full Medicaid benefits, including dental and vision care.
Asset limits: The asset limit is $4,000 if single and $6,000 if married.
Applicants whose incomes are too high to qualify for Medicaid ABD can enroll in the Medicaid spend-down program, which allows incurred medical bills to be subtracted from an applicant’s income that is counted toward the Medicaid income limit.
When an applicant is approved for the spend-down, Medicaid calculates the portion of their monthly income above the program’s income limit – which is known as “excess income.” Enrollees must activate their spend-down by submitting medical bills equal to this amount. Some states allow enrollees to make a cash payment equal to their excess income if they are unable to submit medical bills.
In New Jersey, the Medicaid spend-down is approved in 6-month increments – with additional coverage periods requiring that new medical expenses be submitted.
Excess income is reduced by what an enrollee pays for health insurance premiums, such as Medicare Part B or Medigap.
The Medicaid spend-down does not cover Long Term Services and Supports (LTSS) in New Jersey.
Income eligibility: The income limit is $367 a month if single and $434 a month if married.
Asset limits: The asset limit is $4,000 if single and $6,000 if married.
Medicare beneficiaries who also have Medicaid, an MSP, or Supplemental Security Income (SSI) will receive Extra Help. This program lowers Medicare Part D prescription drug costs. When beneficiaries apply for this program themselves, the income limit is $1,843 a month for singles and $2,485 a month for couples. The asset limit is $16,660 for individuals and $33,240 for spouses.
Medicare beneficiaries with incomes up to $42,142 for individuals and $49,209 for spouses can qualify for Pharmaceutical Assistance to the Aged & Disabled (PAAD) in New Jersey. This is a State Pharmaceutical Assistance Program (SPAP).
PAAD will pay an enrollee’s Part D plan premium up to $20 above the regional benchmark amount. It also reduces co-pays to $5 for generics and $7 for brand medications that are covered by their Part D plan.
Another SPAP is the Senior Gold Prescription Drug Discount Program, which is available to enrollees who have slightly higher incomes.
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.
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying). When only one spouse needs nursing home care, many states only count that spouse’s income toward the eligibility limit.
This income limit doesn’t mean nursing home enrollees can keep all of their income up to the limit. Instead, enrollees must pay nearly all their income 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 $3,000 if married (and both spouses are applying). If one spouse doesn’t need 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.
Applicants are not allowed to have more than $1,033,000 in home equity.
Every state’s Medicaid program covers some long-term care services that are provided at an enrollee’s home, adult day care center, or assisted living facility. These are called Home and Community-Based Services (HCBS) because recipients 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).
When only one spouse needs nursing home care, many states only count that spouse’s income toward the eligibility limit.
Asset limits: The asset limit is $2,000 if single and $3,000 if married (and both spouses are applying). If one spouse doesn’t need Medicaid, the other spouse can keep up to $148,620.
In New Jersey, the Medicaid spend-down does not cover nursing home care or HCBS. However, applicants with incomes above the eligibility limit for LTSS can qualify for those services by depositing income into a Qualified Income Trust (QIT), which is also called a “Miller Trust.” Income deposited in the Miller Trust is not counted against an applicant when determining their eligibility for Medicaid long-term care benefits.
Even though it has been placed in the Miller Trust, nursing home enrollees still have to pay almost all of this income toward their care. But HCBS enrollees are allowed to keep up a personal needs allowance to pay for living expenses.
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 the spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s income. These rules only apply when one spouse receives Medicaid long-term care benefits, and the other spouse doesn’t have Medicaid.
In New Jersey in 2022, these spousal impoverishment rules allowed community spouses to keep:
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 Jersey uses the maximum home equity limit – meaning applicants for nursing home care or HCBS can’t have more than $1,033,000 in home equity.
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 when applicants seeking Medicaid nursing home coverage give away or transfer assets for less than their value. States can also have a penalty period for HCBS. Medicaid will not pay for LTSS during this period.
New Jersey 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 asset transfers and gifts are not allowed. The penalty period’s length is calculated by dividing the amount of money transferred or given away by the cost of nursing home care (which is about $374.39 per day in 2023).
Medicaid is required to recover what it paid for long-term care related costs for enrollees beginning at the age of 55. States can choose to also pursue estate recovery for costs that are unrelated to LTSS (and for enrollees who did not receive LTSS).
New Jersey has chosen to recover the cost of all Medicaid benefits received beginning at the age of 55. New Jersey also recovers from the estates of Medicaid expansion enrollees.
When Medicaid 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 Jersey will delay estate recovery if an enrollee is survived by a spouse or child who is under 21 or disabled. Estate recovery would occur once the spouse dies, or the child turns 21 – or is no longer considered disabled.
The state may also grant a hardship exemption and not pursue estate recovery under certain circumstances.
In New Jersey, the Medicaid estate recovery program recovers both assets subject to probate and assets that pass outside of the probate process. This means the state will attempt to recover from assets held in joint tenancy, life estates and living trusts.
New Jersey State Health Insurance Assistance Program (SHIP)
Free volunteer Medicare counseling is available by contacting the New Jersey State Health Insurance Assistance Program (SHIP) at 1-800-792-8820.
The SHIP can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. SHIP counselors may also be able to offer referrals to local agencies for services like home care and long-term care. This is a list of offices with SHIP counselors in each county in New Jersey.
Elder Law Attorneys
Elder law attorneys can help individuals plan for Medicaid long-term care benefits. The National Academy of Elder Law Attorneys (NAELA) has a search feature beneficiaries can use to find an elder attorney locally.
Medicaid is administered by the Department of Health and Human Services (DHHS) in New Jersey. You can apply for Medicaid ABD or an MSP use this website or by visiting a County Welfare Agency. Applicants who have questions can call 1-800-356-1561.
