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A Summary Of How To Qualify For Medicaid In South Carolina

Qualification for Medicaid Assistance

Qualification for Medicaid Assistance

In Paying For Nursing Home Care In South Carolina

Prepared by

ElderLaw Services of South Carolina, P.A.

 

To qualify for Medicaid assistance in paying for nursing home care in South Carolina, an applicant must meet both medical and financial requirements. And after meeting basic eligibility criteria, the applicant must pass both resource and income tests. If asset transfers have resulted in penalties, those penalties must have expired. Only then will the applicant be eligible for Medicaid assistance in paying the cost of his or her nursing home care.

 

BASIC ELIGIBILITY CRITERIA

 

An applicant must....

 

(1) be 65 or older, blind, or disabled.

 

(2) be a U.S. Citizen or a permanent legal resident living in South Carolina and intending to remain in South Carolina.

 

(3) have a Social Security number.

 

(4) be certified by Community Long Term Care to need an intermediate or a skilled level of care based upon medical needs and physical condition.

 

(5) must reside in a Medicaid certified nursing home for at least 30 continuous days.

 

RESOURCE AND INCOME LIMITS

 

After meeting the basic eligibility criteria, the applicant must then pass both resource and income limit tests.

 

"Resources" are assets to which an individual has legal access and which could be used to pay or his/her care. Resources can include such items as cash, investments (stocks, bonds, mutual funds, etc.) and bank accounts, as well as other types of property that could be sold. But there are some resources that are not counted toward the resource limit and do not affect the applicant’s eligibility. Resources that are "excluded" like this may include the following:

 

Burial contracts with a funeral home for the applicant and spouse; burial plots; and life insurance policies with less than $1,500 cash surrender value.

 

The principal residence and adjoining land and buildings if (i) the applicant states in writing that he or she intends to return to the principal residence; (ii) the spouse or a dependent relative resides there; or (iii) sale of the residence would cause undue hardship to a co-owner.

 

Household goods.

 

Certain types of income producing property subject to limits.

 

Life estate interests -- that is a right to use property for the rest of your life without the right to leave it to your heirs at death.

 

Certain Promissory Notes, Mortgages, and Security Agreements under certain conditions.

 

Non-marketable assets while the applicant is making efforts to sell them.

 

Personal effects such as clothing and jewelry.

 

Retirement funds that cannot be converted to cash.

 

One automobile, regardless of value, and potentially other vehicles depending upon their use.

 

RESOURCE LIMITS

(If Not Married)

 

If the applicant is not married, is legally separated, or if his or her spouse does not live in the community (i.e. is also in a nursing home that accepts Medicaid), then the applicant may have no more than $2,000 in resources.

 

RESOURCE LIMITS

(If Married)

 

If an applicant is married and his/her spouse lives in the community (not in a nursing home or a personal care home that accepts Medicaid), the applicant is allowed to have countable resources of $2,000. An additional $66,480 in countable resources may be set aside for the applicant’s community spouse. These additional resources should be transferred into the community spouse’s name as soon as possible.

 

INCOME LIMITS

 

For applicants who need nursing home care in South Carolina, the income limit is $1,452.00 per month (as of January 1st, 1997). For this category of eligibility, the income of the applicant’s spouse is not considered.

 

Even if the applicant’s income exceeds the income limit, it may be possible to use an "income trust" to allow the individual applicant to qualify for Medicaid. Under such an arrangement, the individual’s income flows into a trust each month, and the trust then makes distributions (payments) in a manner prescribed by Medicaid.

 

TRANSFER OF RESOURCE PENALTY

 

Transfers of assets which are made for less than fair market value (i.e. gifts), which occur within 36 months before applying for Medicaid (referred to as the "look back period") will result in a period of Medicaid ineligibility. A longer "look back" period applies to some situations involving trusts.

 

The length of this penalty period is calculated by dividing the fair market value of the assets transferred by the average monthly cost of nursing home facilities in South Carolina -- $2,914.83 as of September 1, 1996. Each transfer made within the look back period results in a separate penalty, and all penalties run consecutively.

 

At present, the major exceptions to the transfer rules by which transfers can be made without a resulting period of ineligibility are:

 

(1) Transfers between spouses;

 

(2) Transfers of the principal residence or other assets to (i) applicant’s minor or disabled child, (ii) applicant’s child who has lived in the principal residence for at least two years before the applicant's admission to the nursing home and who provided care to the applicant that enabled the applicant to reside at home, or (iii) applicant’s brother or sister if the brother or sister has an ownership interest in the house and has been residing there for at least one year prior to the applicant's admission to the nursing home;

 

(3) Transfers made to certain types of approved trusts -- such as "special needs trusts" for disabled individuals under age 65," "income trusts," and the like; or

 

(4) Transfers made solely for a reason other than to qualify for Medicaid. Strict proof is required for this exception.

 

As of January 1st, 1997, giving property away will be a federal crime if the person making the gift plans to apply for Medicaid. Punishable by a $10,000 fine and a year in jail, this controversial provision of the Health Care Portability Act was signed into law by President Clinton on August 21st, 1996. Although legislation has been introduced to repeal this Act, it is still the law -- so you will be well-advised to check into this before any action is taken.

 

Potential Medicaid recipients are encouraged to seek the advice of a competent elder law attorney prior to applying for Medicaid. Potential Medicaid applicants are also encouraged to secure a medical assessment before beginning any nursing home stay as a private patient or applying for Medicaid.

 

ESTATE RECOVERY

 

Based on legislation that was passed on August 10, 1993, the federal government required that the states begin estate recovery for expenditures of Medicaid dollars. On July 14, 1994, Governor Carroll Campbell signed legislation that began the estate recovery program in South Carolina. The effective date of the legislation is June 30, 1994.

 

What is estate recovery? Under Medicaid regulations, certain assets are exempt from consideration in determining Medicaid eligibility for nursing home care. Prior to estate recovery, a nursing home patient could retain exempt assets -- such as the primary residence -- and pass them to heirs after death.

 

Under the estate recovery law, however, the death of the nursing home patient (and some other categories of Medicaid recipients) triggers the right of the State of South Carolina to make claim against and force the sale of many of these exempt assets -- including the primary residence -- in order to repay the state for Medicaid dollars expended on the patient after July 1, 1994. Thus, absent proper planning, Medicaid eligibility may not save the family assets from being exhausted on Medicaid costs.

 

This brief outline of the criteria used by the Department of Social Services and the South Carolina Department of Health and Human Services in determining Medicaid eligibility of an individual is not all-inclusive and is based upon information available as of January 16th, 1997. Each individual's circumstances are different, and other rules and regulations may apply.

 

Many individuals begin long term care assuming that after they have "spent down" their assets, they will qualify for Medicaid. This can be a mistake. Potential Medicaid recipients are encouraged to seek the advice of a competent Elder Law attorney prior to applying for Medicaid if there is any question about eligibility – either financial or medical.

 

This summary is provided by

ElderLaw Services of South Carolina, P.A.

A law firm focused on planning issues affecting elderly and disabled persons

(803) 799-0554 or 252-4619 Facsimile (803) 799-2517

Information Only: (803) 343-7227 or (800) 236-4293

 

ElderLife Services Incorporated

A care planning and management service for elderly and disabled persons

(803) 252-7080 Facsimile (803) 799-2517

 

 

 

 



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