Kentucky Medicaid Long Term Care Eligibility
Kentucky Long Term Care
Kentucky is an income cap state, meaning that in order to be eligible for Medicaid long term care benefits there is a hard income limit. Non income cap states allow applicants to spend down money for their care, whereas income cap states require the amount to be no higher than their limit at time of application.
1. Residency and Citizenship – the applicant must be a Kentucky resident and be a U.S. citizen or have proper immigration status.
2. Age/Disability – the applicant must be age 65 or older, or blind, or disabled. The applicant must meet certain medical requirements consistent with the level of care requested. Page 17-19 of the following document discusses the medical criteria for establishing eligibility: http://www.klaid.org/ombudsman/docs/consumerguide.pdf
3. Income Limitations – the applicant’s income (wages, Social Security benefits, pensions, veteran’s benefits, annuities, SSI payments, IRAs, etc.) must be less than $2,349 per month. Income in excess of $2,349 can still qualify for Medicaid coverage if excess income is placed into a Qualifying Income Trust (QIT). The trust must be irrevocable and Kentucky Medicaid must be the designated recipient when the beneficiary dies. Only income in excess of $2,349 must be placed in the trust. There is a personal needs allowance of $40/month that is not figured into the total countable income.
4. Asset Limitations (Exempt vs. Available) – Medicaid divides assets into two categories: Exempt and Available. Exempt assets are specifically designated under the rules, and ownership of an exempt asset by the applicant will not result in a denial of benefits. If an asset is not listed as exempt then it needs to be liquidated and applied toward the costs of nursing home care before the applicant can receive Medicaid benefits. Kentucky has a look back period of 5 years with a penalty for people who sell assets below fair market price, transfer assets to others, or give money and property away.
Exempt Assets for an applicant in Kentucky include:
i. $2,000 or less in cash/non-exempt assets if single.
ii. Personal effects and household goods
iii. One home (equity value limited to $595,000) is exempt for first six months of long term care support. It remains exempt past six months if a spouse, a child under 21, or a disabled person resides in it. The house can be transferred with no penalty to the spouse; a natural, adopted, or step child who is under 21, blind or disabled; a sibling who has equity interest in the home and lived with the institutionalized individual one year prior to institutionalization; or another adult, who lived with the resident and provided care for at least two years thereby delaying institutionalization.
iv. One motor vehicle if the vehicle is used for the long term care recipient’s medical treatment, employment, modified to accommodate a disability, or the primary vehicle of the community spouse—no matter the value.
v. Burial spaces and irrevocable pre-paid burial trusts if tied to specific funeral or burial services.
Amount of assets community spouse may retain: The community spouse can keep one-half of all non-exempt resources owned by one or both spouses with a minimum of $25,728 and a maximum of $128,640. All non-exempt resources of both spouses are available to pay for the costs associated with long term care.
Community spouse impoverishment protection: The community spouse can keep part of the institutionalized spouse’s income if the community spouse has an income of less than $2,113.75 per month. If the community spouse can document exceptional shelter expenses (rent, utilities, phone, etc.) to exceed $552 a month then the income limit can be raised to a maximum of $3,216.00
- The nursing home spouse must contribute all income except $40 per month towards their long term care costs.
Kentucky long term care insurance partnership:
This is a program between the state and private insurance companies. Partnership policies protect assets by matching dollar for dollar what policy holders pay into their policies. For example, if you bought a Partnership Policy with a maximum benefit payout of $155,000 then you are able to protect $155,000 of your assets. For married couples each spouse needs to purchase their own policy. Once the $155,000 worth of long term care coverage is used, you may apply for Medicaid with $155,000 worth of assets exempted.
Kentucky programs and services: http://chfs.ky.gov/dms/services.htm
Kentucky page for seniors: http://kentucky.gov/residents/Pages/seniors.aspx