contract can be excluded regardless of value. Your home
may be excluded if a sibling is a joint owner and lives in
your home, your child lives in your home and is under
age 19, is disabled, or has provided care for you for the
past two years that prevented you from being admitted
to a nursing home. If you can exclude your home under
one of these circumstances, you may transfer ownership
of your home to that child or sibling without a Medicaid
penalty or waiting period. This should be done at the time
of admission to the nursing home but prior to applying
for Medicaid and giving a property lien to Medicaid.
If you are married or separated, you receive all the
exclusions listed above. In addition, your spouse
receives another $5,000 burial exclusion and the space
items exclusion. Some assets may also be kept by your
spouse. If your spouse resides in the home, the home and
adjoining property (without limitation) are excluded.
Further exclusion of assets varies based on what is owned
when you are admitted to a nursing home or the date
of an earlier hospital admission. Your spouse’s additional
exclusion is one-half your combined, non-excluded
assets, but never less than $25,728 nor more than
$128,640. These amounts increase in January 2021 and
each January thereafter.
Note that, regardless of your marital status, a life estate
in real estate is given no value. If you have the additional
right to cut timber or take minerals, however, the value
must be counted. IRA’s and the cash surrender value of
life insurance policies also count, but assets that have
no current cash value, such as term insurance or retiree
death benefits do not count.
You should be aware of several myths about Medicaid.
It is not true that assets only in your spouse’s name do
not count. Prenuptial agreements have no affect on
exclusions. It is also not true that a couple must spend
down to $2,000 before one of them can become eligible
for Medicaid.
Medicaid imposes a waiting period when assets have been
transferred, sold for less than full value, or you cannot
account for them. The “look back” period is five years
prior to the month of your application for Medicaid.
Divide the total by $6400 (this amount will increase in
January 2021 and each January thereafter). The result of
the division is the number of months of the waiting period,
which begins only after you are admitted to the nursing
home and have applied and been otherwise determined
eligible for nursing home Medicaid. Giving away, selling
for less than full value, or failing to account for assets may
78 Senior Resource Directory 2020-2021
result in Medicaid denial based on these transfer rules.
Withdrawals of cash for spending for which you do not
have receipts may also result in transfer penalties. Paying
for sitters at home may be penalized even if they are not
paid in cash. Alabama Medicaid requires that, unless the
sitter is employed with a company with which you have
a contract, you must keep daily detailed records of all
services provided and have the sitter sign a receipt for
each payment received. Do not pay for sitters when you
are already in a nursing home with your or your spouse’s
money, even if the nursing home demands that you do
so. Alabama Medicaid now has a rule stating that paying
for sitters while you are in a nursing home will result in
a penalty even if you meet all the other requirements for
receipts and daily records of care.
Professional help may be needed to help navigate the
complicated nursing home Medicaid rules, particularly
for married persons having more than a home, vehicle,
burial arrangements or burial money and $27,728 (2020).
If you or you and your spouse have assets that exceed the
limits for eligibility limits, you should consider placing
excess funds with the Alabama Family Trust to preserve
funds to pay for what Medicaid will not cover after you
become eligible. In addition, if you are admitted to a
nursing home and your separate monthly income greatly
exceeds the monthly income of your spouse, Alabama
Medicaid rules (which appear to violate federal law) may
operate to prevent your spouse from retaining the full
amount of his or her exclusion, so you should consider
placing the funds that you would have to spend with the
Alabama Family Trust so that your spouse can retain his
or her full exclusion. Details concerning the Alabama
Family Trust are included in a separate article in this
publication.
For nursing home Medicaid, the monthly income limit
is $2349 (2020). If your separate gross income before
deductions exceeds this limit, you should contact the
local Medicaid office and request a Medicaid Qualifying
Income Trust (QIT) form. Follow the instructions to
set up a QIT checking account, into which only your
monthly income should be deposited.
If the QIT or Alabama Family Trust documents need to
be signed by your agent under a power of attorney or by
your conservator, the power of attorney or court order
must specifically grant the power to create a Medicaid
QIT or Alabama Family Trust documents.
An unmarried person who is nursing home Medicaid
approved must still pay most of his or her income