Applying for Medicaid in Alabama to pay for long-term care in a community like Fair Haven in Birmingham, AL, can be a very complex process. We asked an expert in the business, David Tankersley, owner and private Medicaid consultant with Goodwater Consulting, LLC, in Homewood, AL*, to help us tackle some of our most frequently asked questions about Medicaid as it pertains to long-term care.
Q: What is the difference between Medicare and Medicaid? A: Medicare is an insurance program that every working person in the U.S. pays into and has benefits they are entitled to if they become disabled prior to age 65 or when they reach retirement age. Medicaid is a safety net for individuals whose income and/or assets are within Agency limits for more than 22 different programs.
Q: What is Medicaid? A: Institutional Medicaid is a program that can help pay for the costs of long-term care. There are strict rules governing a person’s qualification for Medicaid. As of 2018 in the state of Alabama, to be eligible for Institutional Medicaid, an individual’s gross monthly income cannot exceed $2250 and assets cannot exceed $2000. If a spouse is involved, a spouse living at home can keep the home and one vehicle, and a portion of the remaining assets. Medicaid is a safety net for people who cannot afford insurance co-pays and deductibles because their income is so low.
Q: What is Medicare? A: Medicare is an insurance program. People pay into the Medicare insurance system with every paycheck. Medicare is something you are entitled to when you retire or become disabled. Medicare has limited benefits for nursing home care, usually up to a 21-day period in a short-term rehabilitation center, if it is required, following an accident, illness or surgery.
Q: Why purchase long-term care insurance or contribute to health savings if Medicaid will take care long-term care costs? A:
1) Choice – Not all nursing homes accept Medicaid. If you are paying for your own long-term care, you have choices about what nursing home you would like to live in. Also, Medicaid does not pay for assisted living care in Alabama, but most long-term care insurance will cover assisted living as well.
2) Private Room – Medicaid will not pay for a private room, only a semi-private room. A family can opt to pay the private room fee for their Medicaid-eligible loved one, if they are able and willing, but Medicaid will not pay it.
3) Asset Protection – For an individual to be eligible for Medicaid in Alabama, a person cannot have more than $2,000 in assets. People who have property, homes, businesses or other assets that they wish to keep in the family or bequeath to others may want to purchase long-term care insurance, set up a health savings account, or make other financial arrangements that will allow them to fund their own health care needs.
Q: Will I be able to talk to someone at Medicaid on behalf of my parent who is in need of long-term care? A: In order to speak with a representatives about the eligibility of a person other than yourself, there is a specific Appointment of Representative Form in Alabama that needs to be completed. You have to prove that you have the right to speak or act on behalf of another person.
Q: How will I be able to find out if my parent qualifies for Medicaid for their long-term care needs? A: First, you will need to find a Medicaid-approved long-term care (nursing care) facility like Fair Haven in Birmingham, AL. Not all nursing homes accept Medicaid. Second, your parent must be admitted to the nursing home. Third, your parent must be a medical institution for at least 30 continuous days before they can apply for Medicaid. You then have 60 more days to complete the application to Medicaid if you want Medicaid to retroactively pay for the long-term care costs already accrued. Medicaid will only pay up to 90 days retroactively.
Q: What kinds of bank records will I need to prove eligibility? A: It used to be that people had to provide 60 months (5 years) of bank records upfront in the Medicaid application process. Medicaid now uses an asset verification system that allows them to obtain financial records directly from the institutions. If there are any deposits or withdrawals that need addressing, the case worker assigned to you will ask for the necessary documentation.
Q: My spouse needs long-term care. Will I have to sell my home? A: No. A spouse who lives in the home, or a disabled child or sibling with equity interest in a home who was living there at least one year prior to the Medicaid application will be able to continue living in the home. In this case, the house is not considered when doing the assessment. A spouse can keep the house, one vehicle and a certain amount of private assets for their use. In complex cases, families may wish to employ a private Medicaid consultant or Elder Law attorney to help them navigate the Medicaid eligibility process.
Q: What kinds of expenses will Medicaid not pay for? A: Medicaid is paid directly to the institution for the direct care of the eligible resident. It will typically not pay for medications. Medicare Part D is designed to cover medications. Medicaid will not pay beauty shop charges, or pay for clothing.
Q: Will my parent’s social security check need to be routed directly to the nursing home? A: Some nursing homes require it, and others do not. Those nursing homes that do will set up a resident trust account to take care of withholding amounts that pay for the resident’s insurance premiums, $30 allowable for personal needs, etc. Those nursing homes that do not require social security checks to be routed directly to the facility will expect that the responsible party will pay, in a timely manner, the full amount determined by Medicaid to be payable from the resident’s social security and other income.
Q: Why might a family choose to hire a private Medicaid consultant when going through the Medicaid application process? A: A good Medicaid consultant or Elder Law attorney is up to date on current Medicaid rules and regulations, which change frequently. A consultant or attorney can help families prepare their Medicaid application, and can spot potential problems or issues to prepare for. The consultant or attorney can also help families keep on the timeline to submit the application and all its required documentation. A Government Accountability Office (GAO) study in 2014 found that failure to provide documentation is the number one reason for Medicaid denial.
Q: What is a common misunderstanding that may cause a client to be denied Medicaid? A: A CPA or accountant may advise a client that they may, without penalty, distribute a certain amount of money to their children every year. This advice pertains to an IRS gifting rule and is not a Medicaid rule. Medicaid does not adhere to IRS rules. Gifts made within 5 years of the Medicaid application may cause an application to be denied or a transfer penalty imposed.
*In 1990, David Tankersley’s work with the Department of Human Resources gave him his first exposure to Medicaid as he handled family certification cases. In 1991, David made the switch to work as an Eligibility Specialist at the the Auburn/Opelika Medicaid District Office until he transferred to the Birmingham Office in 1994. In 2005 he was promoted to Manager of the Birmingham office where he served in that capacity until his retirement in 2012. He founded Goodwater Consulting, LLC in 2012 and continues to serve the general public, nursing homes, Elder Law attorneys, and probate courts as a private consultant based in Homewood, AL, (205)803-0715.
For more information about life at Fair Haven, including details on our how to make Fair Haven your or your loved one’s new home, contact our admissions team at 205-956-4150, or send an email to Traci Kennedy at [email protected]