Monday, October 20, 2014

What can I do if I have too much income or resources to qualify for Medicaid?

Financial products to help qualify for Medicaid

Medicaid, the Federal program for the care of the disabled and elderly poor, has strict eligibility requirements: the individual applying for Medicaid must have very low income and little assets. The exact numbers and rules will vary in each state. (To learn more about using Medicaid to pay for eldercare in general, see our article on it.)

In some cases, though, an individual who exceeds the income and asset limits by a relatively small amount may be able to qualify by using financial products to ‘lower’ their income by putting the excess money in an account that limits its use to only certain expenditures. This has created a market for products and services to help people who need assistance to become eligible.


Too Many Resources or Savings

If you are over the asset limits for Medicaid, you can’t just give away the excess as Medicaid examines past financial transactions for up to 60 months preceding application.  
Photo by
John Patrick Robichaud
To help meet the assets limits, Irrevocable Funeral Trusts are an option for some individuals who have less than $15,000 over the eligibility limits. It is important to note that these trusts must be irrevocable. 

Some might wonder why use an Irrevocable Funeral Trust to pay for a funeral. Beyond helping to qualify the individual in need of care for Medicaid, these products also have some other benefits. Instead of pre-paying a funeral home, there is no need to select and plan in detail for a funeral in advance. Also, an irrevocable funeral trust can include the travel expenses for family members who come to the funeral. However, despite these advantages, an irrevocable funeral trust is not for everyone. Learn more about irrevocable funeral trusts in our full article on them

Medicaid Qualifying Annuities are specially designed annuities that help couples where one spouse requires care and the other does not. In these cases, Medicaid rules would otherwise force the well spouse to spend  most of their joint assets on the long term care of the other spouse, leaving him or her with limited resources on which to live. In order to avoid this situation, Medicaid state rules allow the couple to create an annuity from the couple’s assets and name the well spouse as a beneficiary. Find out more about how a Medicaid planner can help create a qualifying annuity.


Too Much Income

Similarly, an individual can be disqualified for Medicaid due to an income that is too high. However, here again, some products have come in existence to help address the situation for certain individuals and couples. 

Qualifying Income Trusts, Qualified Income Trusts, or Miller Trusts help individuals overcome the income cap. In some of states, known as ‘Income cap states,’ there is a cap, or maximum on the amount of monthly income someone can have. While this amount will vary in each state, in 2014, $2,163 per month is the highest state income cap and, in some states, it is less. Income over the Medicaid limits is secured in a trust to ensure it’s used on the care and medical needs of the individual. 

‘Medically needy states,’ without an income cap, look at the income of the individual and require that it be spent down by needed medical and long term care expenses before qualifying the individual. Find out which Medicaid financial criteria apply in your state.

Additionally, nonprofit organizations operate Pooled Income Trusts. These jointly managed trusts have lower administrative costs by pooling together many qualifying individual trusts within the state. These are often used in the case of disabled persons, but elderly can also qualify if all transfers take place before the age of 65. Special Needs Trusts have a similar application, but are not pooled and managed by a nonprofit.


Get Help

For both income and asset qualifying products, Federal rules are complex and state rules also matter and vary widely. For example, sometimes one might encounter products known as a ‘Medicaid Qualifying Trusts,’ which are, in fact, no longer compliant for Medicaid. 

Find out more on our site and seek the services of a professional Medicaid planner and/or elder law attorney when you are ready.

Tuesday, October 14, 2014

Getting Paid for Caring for an Elderly Loved One with Medicaid

There are a variety of ways to help bridge the financial gap when caring for an elderly loved one. One of the most attractive approaches is to be paid as a family caregiver. For many families, this option offers two distinct advantages: receiving a new source of income while also ensuring the quality of care that your loved one receives.

In this post, we explain how Medicaid can provide this type of funding. If you are interested in the other, non-Medicaid based programs to get paid for care giving, please see this blog post (“Five Ways to Pay Family Members as Caregivers”).

Photo by the Abbeyfield Kent Society.


Medicaid, a federal program that is administered by the states, operates a series of programs referred to generally as ‘Cash & Counseling.’ The National Resource Center for Participant-Directed Services oversees the states’ Cash and Counseling programs. Other names include as Consumer Direction, Participant Direction and Self Directed Care. Most states have these programs under their own Medicaid waiver programs. They exist with a variety of names, such as Colorado HCBS Waiver for the Elderly, Blind, and Disabled and the New Jersey Personal Preference Program. See the full list here.

Program Description

At their most basic level, these programs provide cash to the participant and allow them the choice as to how best to spend it on their care. Participants can select their own home care agency, which may be someone from their own family. This means that the adult children and, in some cases, the spouse of the recipient could be hired as a caregiver.

When an individual is already enrolled in Medicaid or eligible, the agency will begin with a visit to the home of the senior to understand their needs. They will also contact the recipient’s caregivers and doctors. Once the agency has made a decision how much care is needed, a specific funding benefit is made based on the need and the regional cost of care. The benefit amount can change as the recipient’s needs change.

Most programs consider the situation where the care recipient needs a ‘surrogate’ to help them make care provider decisions. In these situations to avoid conflicts of interest, the care decision maker should be different from the individual who is employed as a caregiver.

Because the caregiver will actually become an employee of the senior, in some states, a third party organization might be required in order to make sure that payroll taxes are filed if those payments are above a minimum level where taxes are due.


  • The care recipient must be enrolled in a Medicaid consumer directed waiver. Sometimes Medicaid waivers are oversubscribed and individuals will be placed on a waiting list.  
  • In most states, individuals must be 65 and/or disabled. Participants with Alzheimer’s, who require nursing, or who require assistance with the activities of daily living are medically eligible.  
  • Participants must be a resident in one of the states where these programs are available. See our list of the state programs for detailed information on your state program.

Understandably, getting paid to provide the care that many family members are already providing is an attractive option for families. However, the programs can be complicated. For people who are considering applying to Medicaid for the first time, a Medicaid planning professional can help. 

Learn More

Individuals wishing to learn more about how these programs can be accessed for your situation should visit our website for the full article on the Cash and Counseling programs and to find out more the program in their state.

Monday, October 6, 2014

New Products Help with Eldercare Financial Planning

As the ‘Age Wave’ Approaches, Private Business Steps in with Eldercare Financial Products

With Baby Boomers nearing retirement age and with many of their parents already needing aging care, private businesses are creating a series of new financial products to help families pay for care and aging related products. Over the past ten years, the market has seen the emergence of a variety of products serving the aging market that can be grouped into three categories. First, there are products that help families to convert assets to pay for care. Second are the loans specifically designed to meet the needs of families facing a paying-for-care challenge and the third is the financial products that help families to meet Medicaid's ever-changing, eligibility requirements.

Asset Conversions

Many families have significant financial resources tied up as assets that, in this non-liquid state, cannot be used to pay for care. Usually, the asset is their home. Reverse mortgages have been available since the 1960s. However, it was not until the late 80s when the government stepped in with regulation and consumer protections, that reverse mortgages gained in popularity. Today, there are what can best be described as private reverse mortgages that allow homeowners to receive a portion of their homes' value in cash without the same upfront costs as a reverse mortgage.

EquityKey and Rex Agreements are two examples that allow homeowners to receive cash immediately by selling a percentage of their home's future appreciation.  This clever idea enables participants to both receive cash, while continuing to hold 100% of their home's existing value. These products are best suited for persons who wish to age in their homes and might need to make home modifications to do so. Learn more from the EquityKey article and the Rex Agreements article on our website.

NestCare is another option, while still in development, this product is a more consumer friendly version of a reverse mortgage except the home is actually being sold in one month, one percent increments.  Even after 100 months, or over 8 years—a complete sale—the homeowner maintains the right to live in their home indefinitely.

Like homes, life insurance is another "asset" that can now be used for pay for care while the policyholder is still alive.  Life settlements involve selling the death benefit of a life insurance policy for a portion of the benefit amount.  This concept, which is also referred to as viatical settlements, began in the 1980s. However, the newer financial products associated with life settlements are designed specifically to pay for care and do so in a manner that allows the policyholder to become eligible for Medicaid should the funds from their life insurance settlement become exhausted. These Medicaid life settlements are being pioneered by an organization called LifeCare Funding. The concept is looked on so favorably that the state of Texas passed a law that requires Medicaid applicants with life insurance to be informed of the option. Several other states are expected to follow suit with their own versions of the law. Learn more about converting a life insurance policy to help pay for long term care on our website.

Eldercare Loans

Loans intended specifically for eldercare became a reality several years ago.  However, the best model for them is still being fashioned given the challenges associated with lending money to someone in failing health. The current version of eldercare loans are made on a short term basis when the borrower is expecting an alternative source of funding to become available.  It is quite common for the need for eldercare to come unexpectedly and families may wish to borrow money for assisted living, for example, while waiting for a home to sell.  Another very common scenario is when one is waiting for veterans' pension benefits.  Elderly veterans and their spouses can receive several thousand dollars per month for care but the application process can take 6 - 18 months.  Once approved, the benefits are retroactive to the date of application, resulting in a lump sum payment. Eldercare loans are given knowing a lump sum payment is forthcoming and the loan can be repaid from that lump sum. Lear more about eldercare loans on our website.

Annuities and Trusts

The third category of financial product specifically intended to help families afford eldercare involves annuities and trusts that enable families to qualify for Medicaid or veteran's pensions.  Both Medicaid and veterans' pensions provide significant financial assistance for care but both programs have strict financial eligibility requirements that take into consideration both the applicant's (and their spouse's) monthly income and their financial assets.  Pooled income trusts, a financial product sometimes managed by non-profit organizations, provide a way to lower one's monthly income in order to meet Medicaid or the VA monthly income requirements. Irrevocable funeral trusts enable a way to pre-pay for one's funeral expenses while at the same time lowering one's overall assets to meet Medicaid and VA asset limits. Medicaid and VA planning annuities achieve this same purpose; they convert assets that would otherwise disqualify the applicant into income that can be used for ongoing care. Often a Medicaid planner can best advise families on how to best make use of these products. Learn more about how a Medicaid Planning works in this article on our site.

Given the already high and ever increasing cost of eldercare and the massive number of Americans expected to require care over the next 20 years, we expect to see the amount of private financial products addressing this market to continue to grow.


Have we missed any product you know of? Do you have experience with any of these products or services? Please share your comment on our Facebook page.

Monday, September 22, 2014

Many Options to Help with Aging in Place

Photo by Ben Sutherland
Many options exist to help when elders and loved ones want to age in place and are looking for financial assistance. In this blog, we summarize several of the different articles we maintain that relate to helping elders and their families pay for the expenses related to aging in place.

Home Modifications

Home modifications are the changes that one makes to their home to make it easier for them to live independently and with the most amount of safety. Support to help pay for these modifications comes from many programs and in many forms. Medicaid, the VA, several state programs and a many community organizations provide support and assistance for home modifications.

Visit the Home Modification article on the website for a complete review of these programs.

Cost saving technologies

A wide range of products are marketed as aging in place technology. In this article, we focus on current technology that helps to reduces costs. With personal safety monitoring technologies, family members benefit from knowing their loved one is safe. For individuals who spend significant time alone, online companions can help keep elders company without the travel costs. Medication Management technologies help seniors who take multiple medications on an ongoing basis and are challenged to remember to take which pills to take when.

Visit the Cost Saving Technologies article on for more complete coverage of the technology options that available in 2014 and help cut costs.

Durable medical equipment

Americans who are aging at home instead of in a skilled nursing facility increasingly need to purchase home or durable medical equipment. Durable Medical Equipment can be understood as different from Home Medical Supplies. Normally, multiple sources of payment exist for any single item of durable medical equipment. Seniors and their family caregivers should be aware of all the possible sources of funds that may be available in order to increase their possible benefit.

Visit the Durable Medical Equipment article on for more complete coverage of the financial options.

Walk in tubs

Bathroom injuries are common for seniors trying to steady themselves on shower doors, towel racks and other fixtures while getting in and out of the tub. Medicare does not consider walk in bathtubs ‘durable medical equipment.’ Medicare will not cover the expenses associated with a walk-in tub. Medicaid, however, does have options that are likely to assist in the procurement and installation of a walk in tub.

Learn more Medicaid Waivers and other programs that can help with buying and installing a walk-in tub on

Stair lifts

Medicaid will likely reimburse for medically required stair lifts as long as they enable elders to continue living in at home and avoid a nursing home. Options exist for elderly veterans and their spouses who are not able to climb stairs for reasons unrelated to their military service. Because a stair life is a type of home modification, various state-specific programs provide financial assistance for them.

Visit the Stair Lifts article on for more complete coverage of the programs to help pay for them.

Home care supplies

Home care supplies are generally disposable and usage is intended for one person. Individual expenses associated with home care supplies vary greatly. When used for medical purposes, prescriptions might be obtained but are generally not required. However, insurance policies will more likely reimburse for the supplies when the elder has a prescription or a statement of medical need from an accredited medical provider.

Visit the Home Care Supplies article on for more complete coverage of the financial programs to help pay for them.

Wednesday, August 6, 2014

The Case for Adult Daycare Extends Beyond Costs

Adult Daycare provides a low cost alternative to nursing home care while maintaining the senior’s health and connection to home.

Somewhere between 25 - 35 percent of seniors will require nursing home level of care at some point during their retirement. Nursing home care costs approximately $77,000 per year. Most Americans cannot afford $77,000 per year in care costs even if they sell their homes and everything in them. This means Medicaid (the federal government entitlement program) will continue to fund the majority of nursing home care.
Photo by Univ. of the Fraser Valley. A happy participant at the Pleasantview Care Facility.

The Baby Boom Generation are starting to retire and many will require nursing home level care over the next 20 - 30 years. Even though there is a declining percentage of seniors in Medicaid funded nursing homes, we face a looming care funding crisis. The demand for elder care is expected to triple by 2050.

Enter adult day care. Full-time adult day care, 5 days / week for a year costs approximately $18,000. This is less than one quarter of the cost of nursing home care. If there were such a thing as 24 hr adult day care, it would still be less expensive than nursing home care by 10%.  Approximately, two-thirds of nursing homes are private, for-profit companies. The opposite is true with adult day care: just over one-quarter are private, for-profit organizations.

While the American Elder Care Research Organization focuses most of our research on costs and financial options, we believe that the reasons to consider an adult daycare program as an alternative care go beyond just the economic. Surveys show that over 90 percent of Americans want to grow old living at home, even if they require long term care. Adult day care allows them to do so. If not in their own homes, then in the homes of family members. The staff to patient ratios in adult day care and nursing homes are surprisingly similar; about 1 to 6 in both.  Adult day care also provides recreational activities and social interactions, both of which improve health outcomes and can further reduce the need for care.

Photo by Univ. of the Fraser Valley. One girl twirls around a senior in a wheelchair as part of the final dance at the Pleasantview Care Facility.
For help discovering financial assistance and adult daycare programs near you or to read about state Medicaid policies visit our page on Adult Daycare.

Friday, June 20, 2014

Calculating the Cost Savings of Walk In Tubs

Our organization is contacted regularly by individuals inquiring about walk in tubs and which government programs, if any, provide financial assistance for them.  We've written in depth on that subject here so we won't go into those details in this blog post.   However, for families struggling with the purchase decision and for program administrators and legislators, we want to examine the economic question of if and when there are care cost savings associated with the installation and usage of walk in bathtubs instead of showers.

There are two ways to look at this question.   The most obvious way is to look at the reduced need for personal care assistance.   If one is able to safely bathe themselves, then a family need not hire a home care professional to provide assistance.  The second, somewhat roundabout way of calculating cost savings, is to look at the medical costs associated with bath related falls.

When caring for a loved one at home for a period of one year or more, the purchase of a walk in tub is a sound economic decision. 

For families in the situation where they must hire outside assistance to help an elderly love one bathe, the calculation is fairly straightforward.  Let's assume an individual needs to bathe 5 times per week.  Family members can provide assistance on both days of the weekend which means on 3 weekdays outside assistance is required for approximately 1 hour / day (although realistically, one cannot hire home care assistance for just one hour.)  3 hours / week times the national average hourly rate for personal care ($20 / hour) equals $60 / week or $3,120 / year.  Basic walk-in tubs costs $2,000 - $3,000 and wheelchair accessible tubs cost $3,000 - $4,000.  Using this math, we can see that should one be caring for a loved one at home for a period of one year or longer, the installation of a walk in tub makes economic sense. 

The more complicated calculation for determining the cost savings of walk-in tubs is by looking at the reduced injury rate.  This question is of greater interest to program administrators when considering if and whether to include walk in tub installations as a covered benefit of their program.  Our methodology is clearly unscientific, however our "napkin numbers" make a clear case that on the whole including walk in tubs as a benefit of assistance or insurance programs is also a good economic decision.

The hospitalization costs of one fall can pay for 10 walk in tubs.

By combining the statistics from a variety of different studies, we estimate the following.  Each month there are approximately 12,000 falls experienced by American seniors in their bathrooms.  One third of which are serious enough to warrant a hospital visit.  The CDC finds the average hospitalization cost for a fall injury is almost $35,000.  Doing the math, we find that over $1.5B is spent annually on medical costs from bath related falls.  Since most seniors are insured by Medicare or Medicaid, both of which are government programs, it seems a no-brainer that walk in tubs should be a covered benefit for the frail elderly at risk who cannot bathe themselves otherwise. 

It is worth mentioning that this blog post strictly examines the walk in tub decision from an economic perspective and that there are other factors which can and should be considered.  Most importantly is the increased sense of self-reliance and dignity afforded by being able to manage one's own personal hygiene.

Friday, December 13, 2013

5 Ways to Pay Family Members as Caregivers

Without question, the most common question our organization is asked is: "Can I get paid to provide care for my parents (or spouse)?"  On own website, we maintain a list of programs that offer that option to family caregivers, but as some new options have become available, we thought a blog post overview of all five different ways family members can be paid as caregivers of their elderly loved ones was in order. 

1) Medicaid Waivers
This is the most common and well known option.  Many states have Medicaid Waivers that allow participants to receive care at home instead of in a nursing home.  Some of these waivers allow for self-direction of care services.  This means the participant is free to select their care providers.  They can "hire" their adult children, other relatives or a few states, their spouses to provide them with personal care.  Relatives are paid the Medicaid hourly rate for home care.  Medicaid Waivers have enrollment caps, so only a limited number of individuals can participate through this option.

The exclusion of spouses in many states from being paid has led to an unintended consequence of some divorces.  While there are rules prohibiting spouses from being paid, there are no rules that prohibit former spouses.

See our website for a state by state guide of the Medicaid programs. 

2) Medicaid Personal Care Services (PCS)
Approximately 50 percent of states allow for personal care services in their Medicaid State Plans.  As with Medicaid Waivers, some of these programs allow for consumer direction of personal care providers enabling participants to hire friends and family members to provide them with personal care. 

These PCS programs differ from Medicaid Waivers in two key ways.  First, typically Medicaid Waivers have less restrictive financial eligibility requirements than PCS programs.  It is not uncommon for the monthly income limit for a Waiver to be approximately $2,130, while Medicaid PCS programs might be closer to $800 - $1,000 / month.  Second, because these programs are offered through the Medicaid State Plans, they are entitlements, unlike Medicaid Waivers which are not. 

3) State Based Non-Medicaid Programs
There are also non-Medicaid consumer directed care programs.  Unfortunately, a much fewer number of states offer these programs.  During our most recent survey, we found 12 states offer consumer direction in their non-Medicaid assistance programs for the elderly. 

4) Veterans Directed Home and Community Based Services
The 4th option is for veterans and their spouses only.  Similar to Medicaid Home and Community Based Services Waivers, there are Veterans Directed Home and Community Based Services.  Under these programs veterans, especially those living in rural areas, are given the flexibility to select what cares services they require and whom shall provide them.  Family members and friends can be hired to provide personal care.

5) Medicaid Life Settlements
Also referred to as Life Care Funding Plans, this is the newest way family members can receive payment for caregiving.  The approach is for holders of life insurance policies who require ongoing care and are considering Medicaid as a long term solution. 

Medicaid counts life insurance policies as assets and generally persons with these policies cannot qualify.  A Medicaid Life Settlement allows the individual to convert their life insurance policy into a dollar amount of care services.  That money is put into an account and used to pay for care for the policyholder.  It can be used for any type of care such as home care, assisted living or to make home modifications that help seniors maintain their independence (walk-in tubs, wheelchair ramps, stairglides etc.). 

It can also be used to pay family members for the care they provide.  For example, a spouse with Alzheimer's may require 24 hour supervision.  They might go to adult day care for 8 hours on weekdays and be looked after by their spouse for the remaining time.  The spouse could be paid the hourly Medicaid rate for the caregiving. 

The account that holds the money is a Medicaid qualified spend down, so when the funds are exhausted the individual is in a very strong position to qualify for Medicaid.

To learn more about each of this option and discover other sources of funding please explore our website.