If you or a loved one needs nursing home care and you’re finding it difficult to afford the high cost, you may wonder if Medicaid can help. In North Carolina, a particular type of Medicaid called “Long Term Care Medicaid” can help offset the cost of nursing home care.

To qualify for this program, you must meet specific requirements, including being a North Carolina resident. Let’s look at the application process and study the crucial facts you need to know before filing a Medicaid application in North Carolina!

What is Long-Term Care Medicaid?

Long Term Care Medicaid is a medical program that helps individuals with limited resources and means to offset the cost of nursing home care. To qualify for this form of Medicaid, you must require nursing home care.  The provider completes a specific form confirming that a nursing home is necessary for your care. 

Am I a North Carolina Resident?

The applicant for Medicaid must also be a North Carolina resident. In the eyes of the Medicaid program, there are three ways that an applicant is considered a resident of North Carolina. These ways include if the applicant:

  1. Lives in North Carolina and intends to stay in the state permanently or indefinitely. 
  2. Is incapable of stating their intent but physically in North Carolina.  
  3. Is 21 years of age or over and must move to an out-of-state long-term care facility but will return to North Carolina within six months. 

Income Eligibility

North Carolina is not a state with a strict income cap, so there is not a set amount of income that will determine your eligibility. Instead, suppose your income is less than your predicted medical expenses, including the cost of home nursing care. In that case, you qualify for Medicaid assistance if you meet the other requirements.  Spousal income is usually irrelevant unless the spouse has inadequate income to care for themselves.

Calculating Your Cost of Care

Once Medicaid establishes financial eligibility, you can determine the cost of care. This cost of care is called “Patient Monthly Liability.” Medicaid arrives at this by a simple equation; Gross Income minus Operational Expenses minus Applicable deductions = Patient Monthly Liability.

When considering financial eligibility, Medicaid expects you to apply for all benefits you qualify for, such as VA Aid & Attendance benefits.  

Income attributed to you applies toward your cost of care. Anytime the check comes to you, Medicaid counts it for your cost of care. However, Medicaid does not involve your spouse’s income in calculating your cost of care.

Income Deductions

Before applying income towards the cost of care, Medicaid permits you to deduct specific types of income from consideration. These deductions include, for example:

  • Personal Needs Allowance: a nominal amount of money set aside for personal items
  • Mandatory and Non-Discretionary Deductions: Federal and State income taxes, FICA, and retirement contributions
  • Monthly Maintenance Needs Allowance: If the spouse living at home has inadequate income Medicaid may allow some income to go to the spouse not residing in the facility.

Asset Deductions

For Medicaid eligibility, an applicant must have no more than $2,000 of “countable” resources. ($3,000 for a couple residing in a facility together). Examples of resources that Medicaid might not count toward your income include:

  • Your principal residence if it meets eligibility criteria
  • Life Estate Interests that terminate at your death
  • Commonly owned real estate
  • Property used in trade or business
  • Personal belongings like clothes or jewelry
  • One vehicle
  • Whole life insurance up to a specific dollar limit
  • Term life insurance

Keep in mind, though, that assets that don’t count for eligibility purposes may still need to be sold by your estate after your death to repay Medicaid for their payments during your lifetime. Your family can lose the “family home” to paying back Medicaid for nursing home care expenses! Your assets must be available and ready for liquidation to pay for medical expenses. 

For married couples, your spouse can keep up to one-half of your combined countable resources up to a limit. This limit changes from year to year. Medicaid determines your assets as a couple on the day you enter the nursing facility (and stay for 30 days).

The 5-Year Look-Back Period

If you transfer any assets for less than the fair market value during the five years before entering the nursing home, Medicaid may penalize you. You do not receive benefits from Medicaid for a calculated period of time. Medicaid decides how long you do not receive benefits based on a formula assigning a more significant penalty period for larger transfers. 

You can accept a return of some of the transferred assets to reduce your penalty period, but this may cause you to go over the asset value eligibility threshold.  If you establish your reason for transferring assets was not for Medicaid eligibility purposes, the transfer may be exempt. For example, 

  • If you were the victim of a crime, stolen assets might not count as a transfer to force Medicaid eligibility
  • If you have a regular pattern of giving that shows you did not give gifts to receive Medicaid eligibility 

There are ways to spend down your assets without causing a Medicaid penalty period. You may spend excess assets on many qualifying items that Medicaid approves of. Examples include:

  • Tangible personal property: Items for your room or new clothing
  • Paying off debt
  • Improving residential property
  • Irrevocable funeral contracts or a burial space.

Filing a Medicaid Application in North Carolina

When filling out the Medicaid application, having an Elder Law attorney will make the process more streamlined and helpful. You may complete the process by:

  • Meeting with DSS in person
  • Fax
  • Mail 
  • Online

We recommend avoiding online submission. Applying in person works well. Anytime you can establish when and what you submitted, it helps your case if those details are in dispute later.  After application submission, DSS will contact you to request additional information. They will verify information, including annuities and homesite equity value. 

DSS is also required to make formal requests for verification. You may request extensions to respond and may ask DSS to assist with gathering the requested information. (1)

Getting the Help You Deserve

Our experienced elder law attorneys at Hopler, Wilms, and Hanna PLLC help clients with Medicaid-related issues such as proactive asset protection planning to prepare for the possibility that you may need Medicaid someday. We also assist individuals in a crisis with protecting their assets from becoming countable for eligibility purposes. After your death, protecting your assets against Medicaid payback is also critical in planning for your loved ones’ future.

Our Medicaid elder law attorneys can assist you with all of these Medicaid-related issues. Contact us today to schedule a consultation and find out how we can help you in your unique situation.

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