This Post will discuss only the monthly cost for a Single individual.
Step 1. In order to calculate how much one must pay to the nursing home when on Medicaid, you must look to that person’s gross monthly income. If the person is paid income quarterly, divide it by 3 to calculate the monthly portion. Make sure there are no deductions for income tax withholding or any withholding other than medical insurance costs or any Court ordered withholding.
Step 2. Total the monthly cost of all medical insurance. This will include Medicare Part B, any other medical insurance such as a Medicare Supplement or a Medicare Advantage Plan. Also include the cost of any Part D plan the person has. Total this monthly medical insurance costs.
Step 3. Determine the Net Income. Subtract the monthly medical insurance from Step 2 from the gross monthly income from Step 1. That is the net monthly income for Medicaid purposes.
Step 4. A person on Medicaid is permitted to keep $45.00 each month from their income. This is called the Personal Needs Allowance. Subtract that from the amount determined in Step 3 above and the balance is the monthly payment to the nursing facility. This is termed PPL for private pay liability.
If the person is enrolled in a LIFE program or Medicaid Home Care through the Aging Waiver process, there is no monthly payment to the program. Because the person is at home and they have costs of the home, they are permitted to keep their monthly income.
BEWARE One of the biggest problem areas in this area is this. While a Medicaid application is pending, the applicant makes no payments to the facility. Instead their family members use their income to pay for household expenses. The problem comes in when the approval is ultimately decided after, say 4 months and the person learns for the first time that they were required to pay the income to the nursing home. Now there is a sizable bill to the nursing home and no money to pay it. Who pays? It is an issue. Often times the family ends up paying it.
So how are the household costs paid? This is where having experienced guidance comes into play. There is an allowance that you can seek called Home Maintenance Allowance. This HMA allows the applicant to hold back $793.10 of their monthly income to pay for household expenses. Often times you must ask for HMA as it is not automatic.
Knowing to make that monthly payment and knowing about HMA are just two simple examples of why you should consider having experienced guidance with the Medicaid application.