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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 South Dakota’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 South Dakota, 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 many services – including hospitalization, physician services, and prescription drugs. However, Original Medicare doesn’t cover vision and dental benefits. Medicare can also leave its beneficiaries with significant out-of-pocket expenses. Some beneficiaries – those whose incomes make them eligible for Medicaid – can receive coverage Medicare cost sharing and some Medicaid-covered services through Medicaid for the aged, blind and disabled (ABD).
Medicaid ABD doesn’t ordinarily cover Long Term Services and Supports (LTSS). People who need those services usually have to complete a separate application and interview process, and satisfy different income limits.
Income eligibility: The income limit is $783 a month if single and $1,175 a month if married.
Asset limits: The asset limit is $2,000 if single and $3,000 if married.
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).
However, nursing home enrollees are not allowed to keep all of their income up to this limit. Enrollees have to pay nearly their entire income toward their care, other than a small personal needs allowance and money 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 has Medicaid, spousal impoverishment rules allow the other spouse to keep up to $128,600.
Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car. Applicants also are not allowed to have more than $595,000 in home equity.
Every state’s Medicaid program covers some community-based long-term care services, which are provided in an enrollee’s home, adult day care center, assisted living facility, or other “community” location. Programs offering these services are called Home and Community Based Services (HCBS) waivers because recipients continue living in the community, rather than entering a nursing home. In South Dakota, HCBS enrollees must need a nursing home level of care.
One HCBS waiver program in South Dakota is the Home and Community-Based Options and Person Centered Excellence (HOPE) waiver, which includes the following benefits:
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 Medicaid, the income limit for single applicants is used – and often only income received by the applying spouse 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, spousal impoverishment rules allow the other spouse to keep up to $128,600.
HCBS recipients can’t have more than $595,000 in home equity.
Applicants with incomes greater than the eligibility limits for nursing home care and HCBS can become eligible for those services by depositing income into a Qualified Income Trust, which is also called a “Miller Trust.”
After it is placed in the Miller Trust, almost all of this income must be paid toward an enrollee’s care if they are in a nursing home. However, some states allow HCBS recipients to keep a significant personal needs allowance to pay for certain health-related 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. With other Medicaid benefits, the income of both spouses is counted – regardless of who applies.
Spousal impoverishment rules allow community spouses of Medicaid LTSS recipients (i.e. the non-applying spouse) to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income.
In South Dakota in 2020, these spousal impoverishment rules allow 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.
South Dakota uses the federal minimum home equity limit – meaning applicants with more than $595,000 in home equity are ineligible 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 institute a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. States can also have a penalty period for community-based LTSS.
South Dakota has an asset transfer penalty for both nursing home care and HCBS. The state uses a 60-month lookback period to calculate this asset transfer penalty – meaning that asset transfers or gifts made during this period may result in ineligibility. This penalty is calculated by dividing the value of asset transfers and gifts by the monthly cost of nursing home care (which is about $7,508 in 2020).
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. The law allows states to also pursue estate recovery against beneficiaries who did not receive LTSS.
South Dakota usually pursues estate recovery from the estates of enrollees who received long-term care. If the state does recover from a beneficiary, it will also recoup what it paid for other services like hospital and medical care.
Congress exempted Medicare premiums and cost sharing from Medicaid estate recovery starting with benefits paid starting on January 1, 2010. Those benefits could only be recovered from beneficiaries who received them before that date while also receiving long-term care.
Free volunteer Medicare counseling is available by contacting the Senior Health Information and Insurance Education (SHIINE) program at 1-800-536-8197.
The SHIP can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. Counselors may also be able to provide referrals for home care agencies or long-term care services. The website for SHIINE contains more information about the services it 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.
South Dakota’s Medicaid program is overseen South Dakota Department of Social Services (DSS). You can apply for Medicaid ABD or an MSP using this website or by contacting a social services office at 800-305-3064. This form can be used to apply for long-term care 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 New York 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.
