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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 North Carolina’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 North Carolina, 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: There asset limits for MQB-Q, MQB-B and MQB-E are $7,860 if single and $11,800.
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).
In North Carolina, Medicaid ABD covers preventive and restorative care, as well as dentures and oral surgery services for adults. However, Medicaid ABD does not cover routine eye visits or eyeglasses for adults.
Income eligibility: The income limit is $1,064 a month if single and $1,437 a month if married.
This is the same income limit as MQB-Q – meaning MQB-Q enrollees who meet Medicaid’s more restrictive asset limit receive full Medicaid benefits.
Asset limits: The asset limit is $2,000 if single and $3,000 if married.
In North Carolina, applicants with incomes higher than the eligibility limit for Medicaid for the aged, blind and disable can enroll in the Medicaid spend-down, which allows medical bills to be subtracted from income that is counted toward the Medicaid eligibility limit. This is called the Medicaid Deductible program in North Carolina.
North Carolina usually approves Medicaid spend-down benefits in 6 month increments – with additional coverage requiring the submission of new medical expenses.
Income eligibility: The income limit is $242 a month if single and $317 a month if married (as of 2019).
Asset limits: The asset limit is $2,000 if single and $3,000 if married.
Medicare beneficiaries who are enrolled in Medicaid, an MSP, or Supplemental Security Income (SSI) also receive Extra Help – a federal program that lowers prescription drug costs under Medicare Part D. Beneficiaries who don’t receive this program automatically can apply for it through the Social Security Administration (SSA). The income limit is $1,615 a month for singles and $2,175 a month for married couples, and 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: An applicant’s income must be less than what Medicaid pays for nursing home care. If only one spouse needs Medicaid, usually only that spouse’s income is counted toward the eligibility limit.
However, this doesn’t mean applicants can keep all of their income up to the cost of care. Nursing home enrollees must pay nearly all their income toward their care, other than a small personal needs allowance 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 only one spouse needs Medicaid, the other can keep up to $128,640.
Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car. Medicaid long-term care enrollees can’t have more than $595,000 in home equity.
Every state’s Medicaid program covers community-based long-term care services, which are provided at an enrollee’s home, adult day care center, assisted living facility, or another location in the community. These services are called Home and Community-Based Services (HCBS) because recipients continue living in the community, rather than entering a nursing home. In North Carolina, HCBS recipients must need help with at least two activities of daily living.
Income limits: The income limit is $1,064 a month if single and $1,437 a month if married (and both spouses are applying). If only one spouse needs Medicaid, the income limit for single applicants is used – and usually only the applying spouse’s income is counted.
Assets limits: The asset limit is $2,000 if single and $3,000 if married (and both spouses are applying). If only one spouse has Medicaid, the other can keep up to $128,640.
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, along with resource and housing allowances. This rule applies when one spouse receives Medicaid coverage for LTSS, and the other spouse doesn’t have Medicaid.
In North Carolina in 2020, these spousal impoverishment rules allow these ‘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. In 2020, states set this home equity level based on a federal minimum of $595,000 and maximum of $893,000.
North Carolina uses the federal minimum home equity limit – meaning that applicants with more than $595,000 in home equity are not eligible for LTSS programs.
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 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.
North Carolina has chosen to have an asset transfer penalty for nursing home care and HCBS. The state bases this penalty on a 60-month lookback period where asset transfers and gifts are not allowed. The penalty’s length is determined by dividing the amount transferred or given away by the monthly cost of nursing home care (which is $6,810 in North Carolina 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 also pursue estate recovery for other Medicaid costs (and recover from enrollees who didn’t receive LTSS) if the enrollee was 55 or older.
North Carolina usually limits its estate recoveries to enrollees who received Medicaid nursing home care or HCBS beginning at the age of 55, although it does recover from estates of enrollees if they were permanently institutionalized.
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.
North Carolina may grant an exemption to estate recovery in cases where recovering from an estate would cause undue hardship.
Congress exempted Medicare premiums and cost sharing from Medicaid estate recovery starting with benefits paid after December 31, 2009, but Medicaid will attempt to recover benefits it paid beforehand. In North Carolina, this could only occur if an enrollee received LTSS.
Free volunteer Medicare counseling is available by contacting the Seniors’ Health Insurance Information Program (SHIIP) at 1-855-408-1212.
The SHIIP can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. SHIIP counselors may also be able to provide referrals for home care agencies or long-term care services. This website has more information about the services HIICAP offers.
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 State Department of Health and Human Services (NCDHHS) in North Carolina. You can apply for Medicaid or an MSP using this website or by visiting your county Division of Social Services.
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 North Carolina 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.