How does one qualify for medical assistance in Minnesota?

There are essentially six tests you must meet to qualify for Medical Assistance (MA) in Minnesota. The first four are easy and straightforward:

test one is Disease. A doctor must certify that you are truly sick enough to need care, whether in your home, adult day care, assisted living facility, or nursing home.

test two is Age. You must be at least 65 years of age, or legally blind or disabled according to Social Security standards.

test three is Citizenship. You must be a United States citizen or, in some cases, a green card holder.

The test oven is Home. You must be a resident of the state in which you are applying. However, if you are in a nursing home in one state, you are automatically considered a resident of that state, even though you may live and vote elsewhere.

The next two tests Assets and ComplianceThey are not that easy to understand. It’s a complicated subject, and different states may have different rules.

Here in Minnesota, the general rule of thumb for assets is, “You can’t get MA if your countable assets are over $3,000.” That sounds like you have to go broke. However, the word “accountant” makes a world of difference. It just means that when Medical Assistance counts your assets to see if you qualify, some assets count and some don’t.

For starters, some assets never count; furniture, jewelry and clothing. That sounds simple. However, what if you have a painting on your wall (usually classified as furniture) signed by Vincent Van Gogh? Now your painting would probably be classified as Art, and Art has its own set of rules. However, not all art counts, so we must know the rules of art! And of course there are exceptions to these rules. Laws relating to property ownership occupy a very large volume.

Some assets count, but not if they’re not available. “Available” means that you have a legal right to get money and can spend it on yourself when you get it. Examples of unavailable assets would be a timeshare you can’t sell, a loan you can’t collect, or an asset you can’t sell because you’re only a partial owner. Other assets don’t count now, but may count after you die, like your home or car. They may not be available now (or may be exempt now), but after your death, they may be assets subject to Medicaid Recapture.

You can also convert book assets to non-book assets. For example, you can spend your money on furniture, clothing, or jewelry. You can upgrade your car. You can fix up your house if it needs new windows or a new roof. You are allowed to finance your funeral. In addition to the $3,000 you are allowed to keep as a sick spouse, Minnesota Medical Assistance law allows you to designate half of your countable assets, up to a maximum of $109,560, as a non-countable “Spousal Allowance” for the well-at-home spouse. This is important and he can designate any assets he wants for this purpose.

Let’s talk about compliance testing. Minnesota Medical Assistance (MA) says you’re allowed to harbor assets if you play the game by their very complicated rules. In effect, they say you can go from having a lot of countable assets to having less than $3,000 and therefore qualifying for MA, but only if they approve the way you do it. Let’s say Tom Smith has scored on all the tests except that he has $3,000 in savings and $100,000 in an IRA. If he gave the IRA money to his son and expected to be eligible for MA, he would be disappointed. He would apply the five-year look-back rule and be penalized a “period of ineligibility,” calculated based on the amount of the gift and a complicated formula.

There are ways to save money (even give it away, if done right) and still receive Medical Assistance. First, you can make the donation, wait 60 months, and then apply for MA. Those 60 months are called the “look back” period, which is the period of time during which MA can review your gifts. After MA determines that a gift was made during the lookback period, its next step is to apply the law to see if a “period of ineligibility” is warranted. This becomes the period of time that MA will not pay any benefits.

A gifting strategy that works is one that is planned ahead, keeping enough cash in reserve to pay for the period of ineligibility should it occur. So Tom Smith (above) could possibly donate 50-60% of his IRA, keeping the balance to pay the nursing home fine.

The advice of a competent Medicaid planner or elder care attorney would certainly be worthwhile if he/she could help save your home and perhaps thousands of dollars.