Take this true/false quiz to learn what you know (or don’t know) about Medicaid coverage for long-term care needs.

#1: I can own my home and still qualify for Medicaid at-home care.
Answer: True. For in-home care, you can own your home if it’s your primary residence. If you own other properties and they pass through your estate, Medicaid will recoup the cost of your care from your estate.

#2: I cannot qualify for Medicaid because I have income (a pension or retirement distributions).
Answer: False. For in-home care, a pooled income trust can be used to shelter all income over the Medicaid limit. The 2022 limit is $954 per month (gross income). If you are in a nursing home, 100% of your gross income goes to the facility unless you are married, in which case your spouse “might” be entitled to keep some of the combined income.

#3: Medicaid will pay for at-home care provided by my daughter and her friend.
Answer: True. You can choose your caregiver via the Consumer Directed Personal Care Program (CDPAP), which allows you to hire any one of your choice to be your caregiver. The exceptions: You cannot appoint your spouse or the person acting as your primary Power of Attorney. Also, the person must be legal to work in the U.S. and willing to be on payroll.

#4: Once I get Medicaid, they will provide all the care I need to stay at home.
Answer: False. Once you are approved for Medicaid, they will assess you for your care needs. If you do not present your needs adequately or use the “wrong language,” you will get less care than you may want or need. There are programs which assess differently, so having guidance here will ensure you get the best possible amount of care.

#5: Medicaid cannot make me cash out my IRA or Retirement account(s) to pay for care.
Answer: True. Medicaid will exempt the principal of your retirement account or any annuity if you are taking a monthly distribution. You must take the required minimum distribution (RMD) to shelter the asset (even if it is a Roth IRA). Note: Most of NY State uses a different life expectancy table than the IRS to determine RMDs. So you may have to take significantly more income from your account than what the IRS tells you; only Westchester, Putnam and NY City use the IRS life expectancy table.

#6: My Mom is now in a nursing home – which we did not plan for – so I guess I will have to spend down all her money.
Answer: False. There is a strategy called Gift/Note that, typically, can protect about 40 to 60 percent of the assets at risk at the time of placement in a nursing home – even if you didn’t do any planning or the planning you did was still within the five-year lookback period.

#7: Dad is going to a nursing home. He gifted each of us $15,000 last year, according to IRS rules, so those transfers are safe.
Answer: False. Medicaid does not follow the same rules as the IRS. If you gifted any money, Medicaid can penalize you for the transfer. A penalty means Medicaid denies coverage for a period of time consistent with the value of the gift.

How did you do with this Medicaid qualification test? If you had any wrong answers, you may want to consult a professional to protect as much of your assets as possible.

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