LTC Bullet:  Cassandra on Medicaid LTC Eligibility

Friday, June 17, 2016


LTC Comment:  Exactly how do so many middle class and affluent people end up on Medicaid for LTC without becoming genuinely impoverished?  And, so what if they do?  Answers after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at to ask questions or get references. ***

*** LTC LIGHT.  Our LTC Clippings subscribers received only seven e-pistles from us this week, so far.  As we enter the dog days of summer, LTC news is light.  So this is a good week to remind subscribers and potential subscribers that one of the best benefits of receiving LTC Clippings is that we only send them when there is something worth reading to share!  We spend as much time sifting through all the news, reports, and white papers washing up on the electronic shores we monitor whether there’s anything worthwhile to report or not.  We do that so you don’t have to.  So when your email in-box is light on LTC Clippings, relax, take a longer lunch, or start your weekend early.  We have you covered.  You won’t miss anything of real importance.  To subscribe, contact Damon at 206-283-7036 or  Now for an LTC Clipping sample and a little LTC humor.

6/16/2016, “The long-term care Walk of Shame,” by Gary Tetz, McKnight's LTC News

Quote:  “Having experienced the walk of shame through dozens of first-class [airplane] cabins, I can hardly bear the thought of adding that indignity to my nursing home admission. With dementia raging and fresh off my seventh hip, knee, elbow and skull replacement, I imagine hobbling through the lobby, trying to avoid eye contact with smug-looking MVP-status residents in silk bathrobes taking their meds from gold-embossed shot glasses.  …  As I once patiently explained to an irate commenter after he took issue with one of my flippant, unsubstantiated pronouncements, this column is called ‘Things I Think,’ not ‘Things I Research and Prove.’

LTC Comment:  Why not close this week of light LTC news with a little LTC humor, which is not an oxymoron to columnist Gary Tetz? ***



LTC Comment:  For the Center’s new research project aimed at “Ensuring Scarce [Medicaid LTC] Resources Reach the Neediest People,” I’ve been reviewing a vast health policy, economics and legal literature on the topic.  I’ll report soon on my findings, but for now, here’s a brief summation.

According to peer-reviewed journals in …

  • Health Policy:  Accessing Medicaid LTC benefits requires impoverishment, so we need a compulsory new government program to pay for long-term care.

  • Economics:  Longitudinal survey data prove asset transfers to qualify for Medicaid LTC benefits are rare and small, so we need a compulsory new government program to pay for long-term care.

  • Law:  Medicaid LTC benefits are readily available to middle-class and affluent elder law clients and accessing them generates average per-case legal fees of $2,500 to $10,000.  But the process is degrading, so we need a compulsory new government program to pay for long-term care.

With opposite premises, policy wonks and economists on one side and lawyers on the other side arrive at identical policy recommendations.  Which is it?  Does Medicaid LTC require impoverishment or doesn’t it?  And whether it does or not, why do so many experts in such different professions agree that more government involvement in LTC is the best course forward?

The answer to the second question is ideological bias.  It’s almost comical to watch these experts tie themselves in theoretical and evidentiary knots trying to force the conclusion that the only solution to the LTC market’s woes is to bring in more government funding, regulation, and control.  I’ll have more to say on this topic, including examples, in future LTC Bullets.

For now, let’s stick to the first question:  does Medicaid LTC eligibility require actual impoverishment or not?  How can one set of professionals (health policy experts and economists) say one thing and elder law attorneys say the exact opposite?  Clearly, the answer is that they don’t read each other’s academic journals.  But, we are reading them and what we’re finding is fascinating.  More on that in future Bullets also.

For the time being, let’s just take one more look at the underlying question:  does access to Medicaid LTC benefits actually require genuine impoverishment?  What follows is the section on Medicaid LTC income and resource eligibility rules from the Center’s latest report:  CASSANDRA’S QUANDARY: The Future of Long-Term Care in New Hampshire (2016).  While the focus is on New Hampshire, this report’s findings and recommendations apply in most respects to the whole country. 


Medicaid LTC Financial Eligibility and Medicaid Planning

Income Eligibility

Eligibility for Medicaid long-term care benefits is not as difficult to attain in the United States as commonly reported.  New Hampshire is no exception.  The State Department of Health and Human Services’ (DHHS) website explains that applicants “Must have net monthly income less than the rate Medicaid pays to the facility.”[1]  Net monthly income is determined by subtracting eligible health care and other expenditures paid out of pocket by the Medicaid applicant from the applicant’s total income.  Such deductions can be substantial.  Because the average Medicaid nursing home reimbursement rate in New Hampshire is $157 per day or $57,305 per year, any medically qualified elderly person with net income at or below that level is eligible based on income.  Although media and even academic studies on Medicaid long-term care financing invariably say the program is only available to low-income people, the truth is that people with income of $57,305 per year fall in the middle income quintile for all Americans according to the U.S. Census Bureau, as of 2013.[2]  Hardly low income.

Asset Eligibility

Medicaid long-term care applicants must also qualify based on their level of financial resources.  The DHHS website cited earlier says the “Resource limit cannot exceed $2,500.”  That’s what most articles and reports also say, but the statement is misleading because it does not take into account exempt resources. 

To pinpoint those uncounted assets, it is helpful to consult the lawyers who advise clients on how to become eligible for Medicaid LTC benefits.  According to the Elder Law, Estate Planning, and Probate Section of the New Hampshire Bar Association and New Hampshire Legal Assistance in their “Medicaid Income and Asset Rules for Nursing Home Residents and Guide for New Hampshire Residents Seeking Medicaid Coverage For Nursing Home Care,”[3]A person's home as long as the equity value is less than $552,000, motor vehicle, furniture, clothing and other personal effects are not countable” which means “Since homes with less than $552,000 in equity are not countable assets, most homeowners may qualify for Medicaid.” 

Other exempt assets, none of which have a dollar limit, include one business, Individual Retirement Accounts (IRAs), prepaid burial plans, and term life insurance.  For a full list of exempt assets including footnoted links to the authorizing federal regulations, see the Pacific Research Institute’s “Medi-Cal Long-Term Care:  Safety Net or Hammock.”[4]  People can and do convert countable assets into noncountable assets by purchasing more expensive homes, new cars and other exempt resources with or without legal advice.[5] 

Spousal Impoverishment Protections

Recipients with spouses encounter far more generous income and asset eligibility rules, including a maximum spousal maintenance allowance of $2,981 per month and a spousal resource allowance equal to half the couple’s joint assets up to a maximum of $119,220 with a minimum of no less than $23,844 as of 2015 [and 2016]. [6]  These allowances increase annually with inflation.  Balances in excess of those limits are supposed to be “spent down,” but the Bar Association guide explains “It is important to note that the money which must be spent down can be used for any purpose that would benefit either spouse, such as home repairs, vehicles, life insurance, prepaid funerals, furniture, travel, etc.”[7] These “spousal impoverishment protections,” originally intended to protect only spouses of institutionalized Medicaid recipients, were recently expanded to cover husbands or wives of Home and Community-Based Services (HCBS) recipients as well.[8]

The “ElderLawAnswers website”[9] speaks to some additional nuances.  For example, if applicants are not happy with their community spouse resource allowance, “a fair hearing can be obtained.”  The “Average monthly cost of nursing home care according to [the] state [is]:  $8,889.94 ($292.24/day).”  That means Medicaid applicants are penalized only one month of eligibility for each nearly $9,000 they give away for the purpose of qualifying for Medicaid.  Finally:  “Actuarially sound annuities are permitted, with certain restrictions.”  More follows below on the enormous costs to Medicaid such annuities can entail.

Medicaid Planning

It is clear from the foregoing, that Medicaid applicants with substantial income and wealth can qualify for Medicaid long-term care benefits with little or no asset spend down required.  But the long-term care eligibility rules are complicated and elastic.  Applicants, and their families, with even much greater income and assets than allowed under the basic rules summarized above often consult lawyers who specialize in the artificial impoverishment of clients to qualify them for Medicaid.  Such “Medicaid Planning” specialists are easy to find.  When asked, interviewees for this project spoke of how Medicaid planners advertise frequently on the radio and in newspapers throughout New Hampshire.  Elder law experts are also easy to find online by means of an internet search for “Medicaid planning in New Hampshire.”  For example:

We assist clients with asset preservation and asset protection for themselves and their families in anticipation of applying for long-term care through the Medicaid program. . . . Our attorneys have significant experience in asset protection strategies, such as Medicaid-Qualifying Irrevocable Trusts; Special Needs Trusts; conversion of assets into income through the use of Medicaid-Qualifying Annuities; Personal Care and Service Agreements; as well as other spend-down techniques that allow for transfers of assets to family members without violating Medicaid gifting rules. We frequently work with clients when preparing and filing New Hampshire and Massachusetts Medicaid applications, meeting with caseworkers for applicant resource assessments, as well as successfully litigating denials of Medicaid benefits.[10]

Medicaid-Compliant Annuities

One of the more egregious eligibility “loopholes” that Medicaid planning attorneys and their clients take advantage of is the “Medicaid-compliant or Medicaid-qualifying annuity.”  Such annuities can be used to shelter large sums of money immediately before an individual applies for Medicaid long-term care benefits, as much as a million dollars or more in some states.  We sought but were not able to arrange interviews with New Hampshire’s Medicaid long-term care eligibility policy specialist to learn specifically how such annuities are reviewed and treated by DHHS.  For details on the Medicaid-compliant annuity problem nationally, see “LTC Bullet:  Medicaid Annuity Abuse:  A Case Study.”[11]  Annuity cases involving hundreds of thousands of dollars are commonplace and well-documented.  So far state Medicaid programs have been unsuccessful in several attempts to reverse the use of Medicaid-compliant annuities in state and federal courts.

209-B Status

It is true that eligibility in New Hampshire is slightly more restrictive, and could be made even more so, because it is one of ten “209-B” states.  This means New Hampshire was grandfathered in with more restrictive eligibility requirements than were allowed after the Supplemental Security Income Program (SSI) replaced state welfare programs for the aged, blind and disabled in 1974.  For example, 209-B states “do not automatically grant Medicaid to persons with disabilities who qualify for SSI because they use their own criteria for determining whether someone is eligible for Medicaid.  These states may have income limits that are higher or lower than SSI’s, different asset limits, or different requirements for what makes someone disabled.”[12]  New Hampshire’s 209-B status enables the state to require institutionalized recipients to sell their homes within six months if they have no exempt relatives occupying their home and no reasonable medical expectation that they will be able to return home.[13]  Non-209-B states do not have this flexibility.

The bottom line, however, on Medicaid long-term care eligibility in New Hampshire, as elsewhere, is that people who seek state funding for long-term care and are willing to accept the conditions that apply, can, with or without the legal assistance of a Medicaid planner, qualify for assistance much more easily than is commonly understood.


[1] “Nursing Home Care,” New Hampshire Department of Health and Human Services;  Extracted August 10, 2015.

[3] Elder Law, Estate Planning, and Probate Section of the New Hampshire Bar Association and New Hampshire Legal Assistance, “Medicaid Income and Asset Rules for Nursing Home Residents and Guide for New Hampshire Residents Seeking Medicaid Coverage For Nursing Home Care,” January 1, 2015, available here at a very long URL.  Cited as of August 10, 2015.

[4] Stephen A. Moses, “Medi-Cal Long-Term Care:  Safety Net or Hammock,” Pacific Research Institute, San Francisco, California, pps. 19-21;

[5] For details and examples, see Stephen A. Moses, “Briefing Paper #2:  Medicaid Long-Term Care Eligibility,” and Briefing Paper #3:  Medicaid Planning for Long-Term Care,, which are parts of “How to Fix Long-Term Care,” Center for Long-Term Care Reform, Seattle, Washington, 2012;

[6] Elder Law, Estate Planning, and Probate Section of the New Hampshire Bar Association and New Hampshire Legal Assistance, “Medicaid Income and Asset Rules for Nursing Home Residents and Guide for New Hampshire Residents Seeking Medicaid Coverage For Nursing Home Care,” January 1, 2015, available here at a very long URL, pps.6-7.  Cited as of August 10, 2015.

[7] Ibid., p. 7.

[8] CMS State Medicaid Director Letter, “Affordable Care Act’s Amendments to the Spousal Impoverishment Statute,” SMD# 15-001, ACA# 32, May 7, 2015; LINK.

[9] “Key Medicaid Information for New Hampshire for 2015,” ElderLawAnswers;  Extracted August 10, 2015.

[10] McLane, Graf, Raulerson & Middleton Professional Association: “McLane services clients from its four offices, with three located in New Hampshire – Concord, Manchester and Portsmouth. Our newest office is in Woburn, MA.” Extracted August 10, 2015. 

[11] Stephen A. Moses, “LTC Bullet:  Medicaid Annuity Abuse:  A Case Study,” Center for Long-Term Care Reform, Seattle, Washington, June 5, 2015;

[12]Does Medicare or Medicaid Come With Social Security or SSI Disability Benefits?,” NOLO Law for All; Extracted August 10, 2015.

[13] Elder Law, Estate Planning, and Probate Section of the New Hampshire Bar Association and New Hampshire Legal Assistance, “Medicaid Income and Asset Rules for Nursing Home Residents and Guide for New Hampshire Residents Seeking Medicaid Coverage For Nursing Home Care,” January 1, 2015, p. 3; available here at a very long URL.  Cited as of August 19, 2015.