North Carolina Long Term Care
1. Residency and Citizenship – the applicant must be a North Carolina resident and 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. Persons must need care for thirty (30) consecutive days. 3. Income Limitations – The applicant’s income must be less than the cost of care in the facility at the Medicaid rate of pay. Medicaid must approve the level of care requested and the applicant must use part of their income to pay for care services. North Carolina calls this “patient monthly liability.” If single, but not medically needy, the applicant’s monthly income (wages, Social Security benefits, pensions, veteran’s benefits, annuities, SSI payments, IRAs, etc.) must be no higher than 100% the Federal Poverty Rate. If medically needy, however, Medicaid will pay all long term care costs exceeding the applicant’s countable monthly income. Income that is not considered countable includes a personal needs allowance ($30.00/month per individual); health insurance premiums and medical expenses not covered by insurance or other benefits; certain spousal or dependent family members’ allowance; and a home maintenance allowance if the long term care recipient expects to return home within six months, but there is no one living in the home.
- Medicaid only considers the income of the applicant and not the income of the community spouse when determining financial eligibility.
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. The state 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.
- Transferring assets to: a spouse (or someone else for the spouse’s benefit), a blind or disabled child, a trust for a blind or disabled child, or a trust for a disabled individual under age 65 (sometimes for the benefit of the applicant in certain circumstances) will not result in Medicaid ineligibility.
Exempt Assets for an applicant in North Carolina include:
i. $2,000 or less in cash/non-exempt assets if single. If married and both spouses require care the asset limit is $3,000. If the assets exceed the limit on the first of the month the applicant is ineligible for the entire month. ii. One home is exempt (equity limit $572,000) if planning to return, a spouse, a child under 21, or a disabled person resides in it. Whenever an institutionalized person sells a previously exempted residence, the money from the sale becomes a countable asset. The recipient may then lose eligibility for Medicaid until he/she has spent down the money and their countable resources are once again less than the maximum. The home may also be transferred to a sibling who has lived in the home during the preceding year or who holds equity interest in the home; or to a child who has provided care giving services and lived in the home for at least two years, thus preventing the applicant from entering a nursing home environment. iii. One car, no equity amount specified. If two or more cars are owned then the most valuable car is exempt. iv. An irrevocable funeral trust with a value of $1,500 or less. Revocable burial contracts are considered countable assets, but if the applicant does not have an existing irrevocable burial contract he/she may put up to $1,500 towards one. v. Life insurance policies if the cash value of all policies are under $10,000 (whole, universal, variable, etc.). Since term life insurance policies have no face value, they are exempt. vi. An IRA paying a fixed, irrevocable annuity stream is not counted as an available asset. vii. Household furnishings, furniture, clothing, jewelry, and other personal effects are not counted. If items are in a storage unit then they may be counted depending upon their use prior to storage. Old business inventory and stock is counted.
Spousal Rules: Amount of assets community spouse may retain:
The community spouse can keep non-exempt resources owned by one or both spouses with a maximum of $123,600. If the community spouse’s assets do not equal the minimum of $24,720, the community spouse is able to retain assets from the institutionalized spouse until the minimum is reached. 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 $2,030 per month. The maximum amount of income a community spouse may keep is $3,090 per month. The additional allowance is determined from housing costs, taxes, insurance, mortgages, utilities, etc. that exceed $582 per month.
North Carolina 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.
North Carolina general eligibility for long term care: http://www.ncdhhs.gov/dma/medicaid/ltc.htm
How to apply for Medicaid and North Carolina Health Choice: http://www.ncdhhs.gov/dma/medicaid/apply.htm
North Carolina state policy on Medicaid covering services for elderly persons: http://aspe.hhs.gov/daltcp/reports/med4rcsD.htm