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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 Mexico’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 Mexico, 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: The asset limits for QMB, SLMB and QI are $7,860 if single and $11,800 if married.
Medicare covers a great number 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).
[mro_survey align ="right"]Income eligibility: The income limit is $783 a month if single and $1,175 if married. (This is the same income limit as Supplemental Security Income – and is equal to 74 percent of the federal poverty level.)
Asset limits: The asset limit is $2,000 if single and $3,000 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 $1,615 a month for singles and $2,175 a month for couples. The asset limit is $14,610 for individuals and $29,160 for spouses.
Medicare beneficiaries increasingly rely on long-term services and supports (LTSS) – or long-term care – which is mostly not covered by Medicare. In fact, 20 percent of Medicare beneficiaries who lived at home received some assistance with LTSS in 2015. Medicaid fills this gap in Medicare coverage for long-term care, but 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 $2,349 a month if single and $4,698 a month if married (and both spouses are applying). When only one spouse needs nursing home care, the income limit for single applicants is used – and usually only the applying spouse’s income is counted.
Note that nursing home enrollees are not allowed to keep all of their income up to this limit. Enrollees have to pay nearly all their income toward their care, other than a small personal needs allowance (of $72 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 needs Medicaid, the other spouse can keep up to $128,640 in assets.
Medicaid also covers some long-term care services that are provided in an enrollee’s home, adult day care center, assisted living facility, or other places in the community. These are called Home and Community-Based Services (HCBS) because recipients don’t need to enter a nursing home to receive them.
Income limits: The income limit is $2,349 a month if single and $4,698 a month if married (and both spouses are applying).
When only one spouse needs HCBS, the income limit for single applicants is used – and usually only the applying spouse’s income is counted.
Asset limits: The asset limit is $2,000 if single and $4,000 if married (and both spouses are applying). If only one spouse needs Medicaid, the other spouse can keep as much as $128,640.
The Medicaid spend-down in New Mexico does not cover nursing home care or HCBS, but applicants with incomes above the eligibility limit can qualify for those services by depositing income into a Qualified Income Trust or “Miller Trust.” Income deposited into the Miller Trust isn’t counted when an applicant’s Medicaid eligibility is determined.
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 apply when one spouse receives Medicaid coverage for nursing home care or HCBS, and the other spouse doesn’t receive any Medicaid benefits.
In New Mexico in 2020, these “community spouses” of Medicaid enrollees are allowed 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. In 2020, states set this home equity level based on a federal minimum of $595,000 and maximum of $893,000.
New Mexico uses the least restrictive home equity limit – meaning that applicants for Medicaid LTSS can’t have more than $893,000 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. To curb these asset transfers, federal law requires states to have a penalty period for applicants seeking nursing home coverage who have given away or transferred 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 Mexico has chosen to have a penalty period 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 monthly cost of nursing home care (which is $7,480 in New Mexico in 2020).
A state’s Medicaid agency is required to recover what it paid for LTSS and related medical costs beginning at the age of 55. States can choose to also pursue estate recovery for Medicaid benefits unrelated to LTSS (and for enrollees who did not receive LTSS).
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 be more (or less) than the actual cost of Medicaid services received.
New Mexico will not pursue estate recovery if an enrollee is survived by a spouse, or by a child who is under 21 or disabled (and receiving Social Security Disability Insurance or Supplemental Security Income). The state may also grant hardship exemptions from estate recovery under certain circumstances.
Every state attempts to recover from an enrollee’s probate estate (meaning the assets that are subject to their will). However, New Mexico’s estate recovery program also attempts to recover assets that pass outside the probate process, including assets held in joint tenancy, life estates, living trusts and bank accounts with “transfer-on-death” provisions.
Congress exempted Medicare premiums and cost sharing from Medicaid estate recovery starting with benefits paid after December 31, 2009, but Medicaid may attempt to recover what it paid for MSP benefits through that date. In New Mexico, this could only occur if an enrollee received LTSS.
Free volunteer Medicare counseling is available by contacting the New Mexico Aging and Long-Term Services Department (ALTSD) at 1-800-432-2080.
The ALTSD can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. Counselors can also provide advice about options for receiving long-term care. This website has more information about the counseling services offered.
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 Human Services Department (HSD) in New Mexico. You can use this website to apply for Medicaid or an MSP online. Applicants who have questions about their application can also call 800-283-4465.
Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare ombudsman contract at the Medicare Rights Center in New Mexico City, and represented clients in extensive Medicare claims and appeals. In addition to advocacy work, Josh helped implement federal and state health insurance exchanges at the technology firm hCentive. He has also held consulting roles, including at Sachs Policy Group, where he worked on Medicare and Medicaid related client projects.