Kentucky Medicaid Facts

By: Laurie W. Valentine-COO & Trust Counsel 

The U.S. Department of Health and Human Services has reported people age 65 or older face a 40% lifetime risk of having to go into a nursing home at some time during their lifetime. About 10% of those who go to a nursing home will stay 5 years or longer.

Those statistics, coupled with the ever-growing cost of nursing home care, lead many to be concerned with how they would pay for nursing home care. It is estimated that 5% of long-term care costs are paid by private insurance; 21% are paid by the nursing home resident; and 74% are paid by Medicare or Medicaid.

Medicaid is a government-funded program established to pay the difference between the cost of nursing home care and a nursing home resident’s own income. To qualify for Medicaid benefits in Kentucky the applicant must meet both a “resource” eligibility test and an “income” eligibility test.

An applicant meets the “resource” (assets) test if the applicant has no more than $2,000 of “countable” assets and if his/her spouse has no more than $113,640 in “countable” assets ($113,640 is the 2012 “community spouse resource allowance”).

Excluded from “countable” assets are the applicant’s home (if the spouse or a dependent still lives in it), personal property and household goods, retirement plan and/or IRA accounts; one automobile of any value; $1,500 of life insurance (if designated as a burial reserve); $10,000 irrevocable funeral contract; and property used in a trade or business (rental property is excluded from this category).

To meet the “income” test the applicant’s countable monthly income from all sources (social security, pension or other retirement income, interest, dividends) must not exceed either: (1) the “special income standard” set by the state (for 2012 that is $2,094) or (2) the state-determined nursing home private pay rate ($196.31 per day for 2012).

A Medicaid applicant (or his/her spouse) who makes “prohibited transfers” (transfers for less than full market value) within the “look-back” period (any time with the five years prior to applying for Medicaid) will be denied Medicaid benefits for a period equal to the value of the assets transferred divided by the private pay rate. Transfers made for the sole purpose of qualifying for Medicaid are counted against the applicant no matter when they were done.

For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.