Medicaid is a joint federal-state public benefit program that pays for long term health care expenses. This may include nursing home, residential care facilities (RCFs), adult foster care, and in home care. It is a social welfare program, with eligibility based on need. The Senior and People with Disabilities Services Division of the State of Oregon ("SPDS") implement the Medicaid program in Oregon. To qualify, the applicant must:

Be an Oregon resident;

 

Income Test
To meet the income test, the gross monthly income of the person applying for Medicaid must be at or below 300% of the supplemental security income standard (the 2005 SSI standard is $579 per month). This amount is indexed annually for inflation. In 2005, the income cap is $1,737 per month.

Oregon is known as an "income cap" state because of the income limit imposed on Medicaid recipients. (Please note: People over the income cap can still qualify by having an "income cap trust" prepared by this office.)

 

Resource Test
In order to qualify for Medicaid, a single person can have only $2,000 in nonexempt resources. This is called the non-exempt resource allowance. In applying the resource test, all "available" resources of both husband and wife are considered.

 

Exempt Assets
For policy purposes, some resources are exempt and considered unavailable. The most significant of these exemptions is the applicant's home. As long as the applicant or the applicant's spouse, minor children or dependant family member resides there, or can be expected to return there, the home is exempt. It need not be sold to pay for medical care during the applicant's lifetime. Other exemptions protect the following assets, with limitations on value: one automobile, personal and household belongings, burial merchandise, burial funds, medical equipment, term life insurance, income producing contracts, and miscellaneous resources described in the administrative rules. Assets may be exempt and still be subject to claims of the government for Medicaid recovery upon the applicant's death.

 

Community Spouse Resource Allowance (CSRA)
If the applicant is married, the non-applicant or community spouse is allowed to keep a modest share of marital assets to avoid impoverishment. This excluded share is called the Community Spouse Resource Allowance ("CSRA"). The CSRA is calculated using a formula applied to all non-exempt resources owned by both spouses on the first day of continuous care received by the Medicaid applicant. The community spouse is allowed to retain one-half of the value of the available resources, up to a maximum of $95,100, with a minimum allowance of $19,020.

 

For a couple, the resource test is met when the only assets are the amount allowed for the CSRA, the applicant's $2,000 non-exempt resource allowance, and the exempt resources. When a couple has excess resources, which are not exempt, and do not fall within the CSRA, the applicant is not eligible for Medicaid benefits.

 

Planning Opportunities
There are several planning techniques available to qualify for Medicaid with income in excess of the income cap, including income assignments, qualified domestic relations orders, and income cap trusts.

 

The most common strategy for excess resources calls for the applicant to "spend down" the excess until they can qualify. The law does not require that resources be spent on medical care. So long as fair market value is received for the money spent, the expenditure will qualify the applicant. After the excess resources are exhausted, the government will take up the cost of health care.

 

It is important to seek legal advice before applying for Medicaid, and especially before beginning a spend down of non-exempt resources. Such expenditures should be made in a way that will most benefit the community spouse. In some cases, nonexempt assets can be converted to income. In addition, there are other techniques available which may better serve the needs of the community spouse.

 

For example, it is possible to obtain a court order increasing the CSRA to provide a higher level of support for the community spouse. It is also possible to transfer resources to the community spouse in excess of the standard CSRA, in order to generate income needed to reach the minimum monthly maintenance needs allowance ("MMMNA") for the community spouse.

 

The MMMNA is based on the actual shelter expenses of the community spouse. It is calculated after eligibility of the applicant has been determined, and allows shifting of  he applicant's income to pay necessary living expenses of the community spouse. It is possible to increase the MMMNA by either persuading SDSD that "exceptional circumstances" are present, or by obtaining a court order. Elder Law attorneys have generally been successful in obtaining support orders increasing the MMMNA under ORS 108.110.

 

Conclusion
The advantage afforded by seeking legal advice can often be measured only in terms of peace of mind. In the case of Medicaid assistance, however, advance planning can save many thousands of dollars. Anyone anticipating an application for Medicaid should consult an attorney to determine whether legal steps may be taken to improve their position.

 

If I can ever be of assistance, please don't hesitate to call.

 

Jim Little
Phone (503) 873-6081