Navigating Medicaid for seniors can be painful

You have to be very impoverished or very sick to qualify for Medicaid late in life, so no wonder people put off thinking about it.

It's also hardly the way most of us would want to live out our final days - or years. Depending on whether your state has special waivers allowing for limited at-home care, as Kentucky does, most Medicaid care will mean sharing a nursing home room with other people.

"Quality of life can decline dramatically," said Howard Gleckman, a senior fellow at the Urban Institute, who co-authored a recent report on long-term care financing. "It's not great care."

The issue is especially relevant in Kentucky, a low-income state where about a quarter of the population is already on Medicaid. Census figures show Kentucky's median household income was $43,342 in 2014, compared with $53,657 nationally.

In this region or elsewhere, to qualify for a Medicaid nursing home bed, you're going to need massive documentation. And if you or a loved one wants care at home, you'll likely wait a long time, warns Gleckman. In his home state of Maryland, waiting lists for an at-home caregiver covered by Medicaid is about three years.

Up to 30 percent of Medicaid funding covers long-term care, totaling about $100 billion a year. More than two-thirds of older adults will need some personal assistance before they die, and almost half will need so much care that they would be eligible for private long-term care insurance or Medicaid, according to the report Gleckman co-authored last month  from the Long-Term Care Financing Collaborative.

So what to do in the meantime?

Although many people think about ways to shelter assets so they can qualify for Medicaid sooner, Urban Institute research has shown it isn't all that common.

"There are a lot of families making hard decisions on how to allocate money they’ve saved all their lives," Jeff Myers, CEO of Medicaid Health Plans of America, said. "It's a big social issue."

It can cost an average of $90,000 a year for nursing home care, so most people burn through savings pretty quickly. Some begin transferring assets to their children far earlier so there is some semblance of inheritance. Many believe that's unethical, but it can also make the transfers subject to what's known as a "clawback" or forfeiture if it occurs in the five years before the elderly family member's application for Medicaid.

Under some states' waivers, Medicaid pays a certain amount for in-home care, and in some cases family members or friends can even be paid for non-medical services such as housekeeping, said Kelly Gannott, a partner at Kentucky ElderLaw in Louisville.

More often, Medicaid pays for nursing home care. But not every nursing home takes Medicaid, and some have only a few beds set aside for Medicaid patients. Gannott said some facilities require people to pay privately for a year or two before allowing them to stay as Medicaid patients.

But she said, “That’s probably in violation of federal law” because Medicaid beds should be for any Medicaid patient although in her area, “No one has challenged it yet.”

Medicaid is a state and federal program, so state laws vary when it comes to what it covers and what you can keep. But here are some general things to consider:

• In most states, an individual can give one car to a child - and it doesn’t have to be a 1974 Chrysler either. The same applies to art. 
• In order to qualify for Medicaid, an elderly widow or widower can’t have more than $2,000 in “countable resources,” although qualified retirement accounts are exempt in some states.
• In many states, most Medicaid individuals still receive Social Security benefits, but nursing homes can access these funds to pay for the room on top of the Medicaid coverage.
• Seniors can also keep their houses for six months on the assumption they might recover (unless the house is worth more than about $520,000), Gannott says, but then either apply for six-month extensions or put the house up for sale to pay the nursing home. 
• In the case of a couple, a house and a car for the spouse and personal property such as wedding rings are exempt, and the spouse can keep half of countable resources up to a maximum of $119,220.

Clearly, Medicaid can get complicated quickly. So it's crucial for families to keep track of elderly loved ones' financial and medical paperwork and discuss long-term care plans with them as early as possible, said Sandy Markwood, CEO of the National Association of Area Agencies on Aging.

“These are important discussions to have before they’re in that crisis situation,” Markwood said.

Gannott said families should carefully look at nursing homes before choosing one, and talk with other families who have loved ones there. She said she’s heard just as much praise and just as many complaints from family members with seniors in private-pay nursing home beds and in Medicaid beds.

“There is no facility that would have enough staff to take care of your loved one the way you would. That just doesn’t exist,” she said, adding that she advises people to visit their loved ones often. “You’re there, so you’re constantly watching. And if you’re there, they’re going to pay more attention to your family member. It’s just human nature.”

Reporter Laura Ungar, who also covers health for USA TODAY, can be reached at 502-582-7190 or lungar@courier-journal.com.