Special Assistance Vs. Medicaid: What You Need to Know

By Allyson Fion | October 1, 2021

 

So, your loved one needs to enter into an assisted living facility, you’ve researched the medicaid qualification criteria, and you qualify! You are all set, right? Not quite. While Medicaid does cover long term care costs, it only covers long term care costs in skilled nursing facilities. 

For Assisted Living, the state funded program that covers this cost is called Special Assistance. Now, you may be thinking this is a tomato/tomahto issue, but it’s a bit more complicated than that. There are several differences between qualifying for Medicaid and qualifying for Special Assistance, and qualifying for one can mean you are ineligible for the other. 

Let’s take a look at the major differences. 

 

Income

When it comes to Medicaid, if the income is less than the skilled nursing facility’s private pay rate, there are no issues. In fact, the higher the income, the more options your loved one has amongst high quality facilities. 

On Special Assistance, however, there is a strict income cap. The income cap for Special Assistance is $1,247.50, and not a penny more. If your loved one needs a special memory care unit within an assisted living facility, that income cap is slightly higher at $1580.50. 

 

Assets

Like Medicaid, Special Assistance does have an asset limit of $2000. However, the biggest difference between Medicaid and Special Assistance asset allowances is how married couples’ assets are treated.

While the income cap for Special Assistance poses a hardship for many people, the asset rules for married couples does shine a bit of a brighter light. With Medicaid, the spouse of an applicant can only have up to $130,380 in assets. With Special Assistance, however, the assets of the non-applicant spouse are not counted. In other words, as long as the applicant qualifies for Special Assistance, there is no limit on the assets of their spouse. In addition, the spouse needing Medicaid can transfer all their assets to their spouse with no transfer penalty in order to get down to their $2,000 limit.

 

Gift Transfer Rules

Both Medicaid and Special Assistance have gift transfer rules. While Medicaid looks back at the last five years for gift transfers, Special Assistance looks at the last three years. If your loved one is found to have transferred assets in these time periods, a penalty period will be instituted in which your loved one will not be eligible for coverage. 

For Medicaid, this penalty period does not begin until your loved one has entered a skilled nursing facility, is under the asset/resource limit, and is otherwise eligible for Medicaid, save for the transfer penalty. For instance, if the penalty period is 10 months, the family has to private pay for 10 months of nursing home care before Medicaid benefits can begin.

For Special Assistance, the penalty begins the first day of the month following the transfer, regardless of when your loved one otherwise became eligible for Special Assistance. So if the transfer happened 3 years ago, the penalty period begins 3 years ago.  Using the same penalty period above of 10 months, the clock starts ticking on the penalty period back when the transfer was made, so 10 months will be over before your loved one needs Special Assistance 3 years later, in the current day in time.

 

Estate Recovery

Lastly, you may have heard of the dreaded estate recovery issue, in which Medicaid could take your loved one’s house to pay themselves back after your loved one passes away. With Special Assistance, however, there is no estate recovery, unless your loved one used Medicaid to cover certain personal care services, but that is typically a small number.  

***

Now that you understand the major differences between Medicaid and Special Assistance, you may be thinking that Medicaid, rather than Special Assistance, is in fact what your loved one needs, because that is what they financially qualify for. Unfortunately, it’s not as simple as choosing a skilled nursing facility (Medicaid) over an assisted living facility (Special Assistance). 

Just like qualifying for these funding programs, your loved one must also qualify for the appropriate level of care. Medicaid requires a doctor to complete a form called the FL-2, which states what level of care your loved one needs. Once the FL-2 form is completed, Medicaid will send that form and your loved one’s medical records to a 3rd party company that reviews the medical records and approves the level of care listed on the FL-2. 

As you can imagine, there is little to no wiggle room when it comes to qualifying for these programs. Your best course of action is to plan in advance for both scenarios. To learn more about the types of care facilities, which level of care best suits your loved ones, and how to plan ahead, read “How to Afford Long Term Care: Advanced Planning Can Help.” 

 

Still have questions? Get in touch with us today and kick off your advance planning. 

 

Reference: https://www.masonlawpc.com/hot-topics-and-info/nc-medicaid-and-special-assistance-rates/