In this blog, I attempt to give some insight on a critical point of confusion in elder law which is the difference between assisted living and skilled nursing and the governmental programs available for financial assistance in each type of facility.
Despite what you may have been told, traditional long-term care Medicaid does not pay for a stay in an assisted living facility. However, Special Assistance Medicaid, a subset of the Medicaid program, is another needs-based governmental program that can help pay for care in assisted living facilities. The rules of the two programs have some similarities but also many stark differences. The first thing to understand is the different care levels for each type of facility. To receive traditional long-term care Medicaid benefits one must be eligible for skilled care nursing and have an FL-2 form signed by a physician. Assisted living is a lower level of care. Assisted living is generally when one is no longer able to live safely at home due to mental decline or otherwise, but is able to handle enough daily living activities so as not to be eligible for skilled nursing care.
Just like traditional long-term care Medicaid, a single Special Assistance applicant can have only $2,000 of countable assets to qualify. However, the list of countable assets varies slightly between the two programs.
Additionally, in some cases, Special Assistance Medicaid will not be accepted as full payment by the facility and what is known as personal care services (PCS) can be an out-of-pocket expense. PCS are hands-on assistance with activities of daily living. Some assisted living facilities actually do not accept Special Assistance Medicaid at all. In other words, partial or full private pay in an assisted living facility is still possible even if you can qualify for Special Assistance Medicaid.
There are several less onerous aspects of the Special Assistance program (“SA”). First, SA only pursues estate recovery for PCS (see http://lawfirmcarolinas.com/blog/north-carolina-medicaid-planning-the-basics/ for an explanation of estate recovery). Secondly, SA has a 3-year review instead of 5 years (see http://lawfirmcarolinas.com/blog/north-carolina-medicaid-planning-the-basics/ for an explanation of the 5 year review for traditional long-term care Medicaid). Additionally, an SA sanction begins to tick away the month after the gift was made as opposed to at the time of application as is the case with traditional skilled nursing Medicaid.
Next, if you are married, unlike skilled nursing care Medicaid, SA treats your spouse separately, but maintains the exception to the sanctionable transfer rules for transfers among spouses. Therefore, SA qualification for an applicant when there is a spouse at home is actually relatively simple; however, long-term care planning for the spouse at home must be considered as well. Lastly, the private pay costs for care in an assisted living facility is significantly lower than skilled nursing care. Some assisted living facilities can cost as low as $3,500 per month without any governmental assistance. For some elders, a combination of their social security, pension and RMD income may be enough to foot the bill in assisted living.
This all seems good, but there are other variables which can make qualifying for SA much more stringent than Medicaid in a skilled nursing facility.
Probably the most significant restriction in qualifying for SA is the income limitation. Whereas there is no income limit for Medicaid in a skilled nursing facility, there is a strict income cap for SA eligibility. Currently, if the applicant has more than $1,247.50 (gross) income per month, he or she will not be eligible for SA for basic care at an assisted living facility. If the applicant is in a specialized memory care unit in an assisted living facility, the income cap is higher, currently $1,580.50 gross income per month.
SA also eliminates one of the primary qualification strategies for countable real estate. The popular, but often misunderstood and misapplied, strategy colloquially known as the one percent deed is ineffective for SA because tenants-in-common property is a countable asset under the SA rules. Consequently, it is very difficult for a single applicant to protect real estate or qualify for SA when they own real estate other than their primary residence.
In summary, a competent conversation regarding long-term care planning should always address the difference between assisted living and skilled nursing care because they are vastly different, not only with respect to care and expense, but also in the eligibility requirements for governmental assistance. The possibility of both types of facilities must be considered. In some cases, one enters an assisted living facility until their health declines to a degree where skilled nursing becomes appropriate and from there they transfer to a skilled nursing facility. Fittingly, a long-term outlook is always the best approach when it comes to planning for long-term care. If you or a loved one is concerned about long-term care planning, please reach out to the estate planning department at Law Firm Carolinas to discuss your goals.