Asset Testing For Senior Medicaid Eligibility

We wrote an article today on our health insurance site about how some Colorado lawmakers are pushing for the return of asset testing in determining eligibility for the state’s Medicaid program.  The federal government – via the Children’s Health Insurance Program Reauthorization Act – has been encouraging states to expand access to public health insurance for children.   This push to insure more children, combined with the recession, has resulted in a dramatic increase in the number of people enrolled in the Colorado Medicaid program.

But although children make up the majority of the Medicaid population, a much larger chunk of the state’s Medicaid budget is spent on care for Colorado’s seniors.  (see page 8 for data from 2004-05).  More recent data from 2007-09 states that Colorado spends more than three quarters of it’s Medicaid dollars on “institutional care” – which obviously includes nursing homes for seniors in need of long term care, but could also include institutional care for younger disabled Medicaid beneficiaries.

If you read the article in the Denver Post about asset testing for Medicaid, it’s important to note that the provision allowing the state to enroll applicants in the Medicaid program based on income rather than income combined with assets only applies to those who are applying for “Family Medicaid” (public health insurance for low income families with children).  Prior to 2006, the state used asset testing as well as means testing for all Medicaid applicants, including those applying for health insurance benefits for low income children and their parents.  Since then, however, low income families with children have been able to qualify for Medicaid (particularly for children) based on the family’s income without regard for assets.

This provision does not apply to seniors applying for Medicaid to cover long term care.  As you’re probably aware, there’s a five year “look back” period where the government can look to see if a person has given away any assets in the five years prior to applying for Medicaid.  And of course assets that are currently in the applicant’s name will also count against his or her eligibility for Medicaid.  It’s always a good idea to contact a qualified attorney in order to make sure you’re in compliance with Medicaid rules regarding asset transfers and Medicaid eligibility.  And if you want to bypass the whole process of having to spend down your assets in order to have Medicaid cover your long term care needs, a good long term care insurance policy might provide peace of mind.

One Response to “Asset Testing For Senior Medicaid Eligibility”

  1. Most people overestimate the cost of a good long-term care policy. A healthy, married couple in their mid/late fifties, can share a policy that starts off with over a half million in benefits for about $100 per month per spouse.
    There’s a new type of government-approved long-term care policy that can protect your assets from Medicaid even after the policy runs out of benefits.
    Peter D.

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