If an elderly person has an income that is higher than Medicaid limit, but no assets, how are they expected to pay for nursing home?

Medicaid skilled nursing home coverage is a 2-test thing. First, the individual must meet and remain below the State's income limit threshold AND ALSO one must meet the "level of care" requirement your State uses. As other have said, each State is slightly different on both accounts: asset limit and the level of care needs and the later the State will not necessarily tell you what that specifically is. That said, generally a person who cannot do 2 or more ADLs AND 2 or more IADS may qualify IF they have a medical need.

The six standard ADLs are generally recognized as bathing, dressing, toileting, transferring (getting in and out of bed or chair), eating, and continence. IADLs, or Instrumental Activity of Daily Living, are more complex sets of skills we need in order to live independently. These skills are: using the telephone, shopping, preparing meals, housekeeping, using transportation, taking medication(s), and managing finances. If a loved one (LO) cannot do several of these tasks AND has a medical need which required skilled nursing care; once one has spent down one might qualify for Medicaid long term care; but a nursing home does NOT have to take your LO. One just does not call up and say take them.

Often, after a LO was hospitalized (say they had a bad fall and perhaps need PT/rehab) OR perhaps they need IV antibiotics for a few weeks post an inpatient hospital stay; as part of the discharge planning the social workers at the hospital can help arrange a temporary post acute care hospital discharge to a nursing home (Medicare likely will pay for some of this stay). That can start things, if one has lots of other things in place. POA, Advanced Directives, you having access to all accounts, on and on.

YES have an elder care attorney in your state help with all of these documents AND IMPORTANTLY to review the paper work you/your LO might have to sign when entering the nursing home post a hospital stay. Make sure you do NOT agree to be personally financial responsible AND make sure YOU do not accept responsibility to take them back OR to work out a safe discharge for them. THAT NEEDS to fall on the nursing home to work out.

If there are no assets at all (no home, no care, no funds in a IRA, not stocks, on and on); then one can "spend down." Fees to a lawyer to help you with this should be paid out of you LO's funds; this is an allowable expense for Medicaid. Ditto, all funeral expenses should be prepared out of your LO's funds; this also is an allowable expense. Then if the LO enters a nursing home; work with your attorney to figure out how much to "pre pay" the nursing home to assure their total asset level is below, well below, the State's threshold AND THEN APPLY for long term Medicaid nursing home coverage IF the physician at the nursing home believe your LO would qualify for the "level of care" YOUR State requires. The nursing home folks generally know what that is and they will have to fill out paperwork on their end; such as having a diagnosis of dementia or other medical conditions requiring long term nursing care from a physician AND other paperwork confirming inability to preform some of those ADLs/IADLs.

They would then be "Medicaid pending" and once approved (may take a few weeks or months) then they are in. BUT THERE IS LOTS of paperwork to collect NOW before applying. You'l need all bank, financial accounts, taxes filed, pension/social security payments, IRA distributions on and on GOING BACK 5 years! Any assets which has been sold (home/car), transferred, gifted needs to be accounted for. ALL of this paperwork is submitted to your State when you LO applies for Medicaid. If you have online access to all your LO's accounts, records, this is easier and goes faster. Your attorney can help with all of this. Once approved; your State Medicaid office will determine the monthly amount your LO must pay to the nursing home; the so-called "cost of care contribution" to pay each month.

Speaking from experience - if you do decide to retain an elder law attorney, or any attorney, to assist in your planning - do not hire one who wants to provide a total package, i.e., "look back" planning to get you to the financial level where you qualify for Medicaid, a new will, a "Family Support Team", a medical advance directive, annual updates, etc. I bought in to one of those packages, then found out that it was nothing but a money maker for the attorney. The best way to go is with a well researched, highly recommended attorney, who charges by the hour. They may charge three or four hundred per hour, however, in the long run you will get what you pay for, and probably be a lot better off all around, including financially.

An elderly person with an income higher than what Medicaid allows is not expected to pay for a nursing home on their own.

What is expected is that their monthly income gets turned over to the nursing home every month with a small bit (usually under $100 a month) held back that is for their personal use. Then Medicaid picks up the rest of the bill.

So the $3,000 a month your mother gets would go to the NH. The other $5,000 or more left on the bill will be paid by Medicaid.
Once the nursing home "reduces" her income by about $2,900 a month, she will qualify for Medicaid.

If you're an old person like me, you probably WORRY-- a LOT. "The Golden Years"?--not so much! My spouse (94) and I (soon to be 87) did plan and tried to provide for our old age. We married in our 40s and retired at ages 76 (him) and 78 (me) from careers in the nonprofit sector. We bought long-term care insurance (the premiums are now VERY pricey), but we didn't have the time or resources to accumulate a $1 million retirement fund. So, we have too much to qualify for any assistance but definitely not enough to pay $8-10K+/month to a care facility for long. On top of that, we NEVER anticipated living as long as we have. Surprise!!

Big problem. Major dilemma that I constantly hope "resolves" before we need facility care. (We are committed to NOT making life miserable for our adult children by becoming dependent on them for care.)

They are cared for by family members at home, as there is no other option. Unless they can find a board and care facility at $3000 per month or thereabouts, willing to take them in. This has been a dilemma for ages now. An elder care attorney can only do SO much!

Ideally what happens is they do is a Qualified Income Trust aka a Miller Trust and hopefully she lives in a State that allows for these to be done. Some States have it so that it’s relatively easy to do…. I’d try to speak to someone at your area on Aging as to if Miller is done in your State and if so how approached. If not then she does something that is similar and you’ll have to find a CELA level of elder law attorney to guide you in doing whatever it ends up being. Not a DIY.

in a nutshell this is how Miller works: most States have as the monthly income max set at $2742. For really old elders, they get under 2k in only SSA so they are OK on income. These are the elderly who get the average SSA payout of $1200 / $1500 a mo. They are easily impoverished. But for younger retirees, like your mom, they worked and make lots more $ paid into the SSA system so many are close to the SSA max of $3300. Like your mom. (And many are still working at 75 too! Plus getting the max on their SSA $). Plus She has ever more $ with a lil extra pension. But even with this still not enough to pay for a NH at 10K or more a month.

Enter Miller. What it does is become legally the erstwhile owner of the retirement income that is guaranteed and solid in its source. SSA retirement income is such a guaranteed income and it becomes owned by the new Miller Trust. Voilà! That $3200 a month of moms is no longer hers, so now she only has that teeny pension as her only income so totally ok for LTC Medicaid limitzs. What will probably be highly encouraged to happen is to make the NH the representative payee for the Miller Trust. So NH gets her sSA $ paid to them directly via the Miller. Her pension too will be a copay to the NH as well but from this one, will more than likely be the one that her smallish personal needs allowance comes out of. The PNA varies by State. From $35 -$135. Most States do $50 or $60 and it’s designed to pay for hairdressers, clothing replacements and toiletries.

fwiw allowing the NH become her rep payee has pros & cons. It will make paying for care way waaaay simpler. The biggie on cons is that should you ever want to move her from this NH it will be beyond a beast to ever do this as getting a rep payee changed back and to another payor is quite difficult if not impossible as SSA does not recognize POA. So mom would have to be competent and cognizant enough to be able to deal with doing changes via SSA system to do a rep payee change month or years from now.

Having high SSA retirement income is going to be more & more common as lots of folks are going to be younger retirees needing a NH sooner due to Covid imho. They are going to be 75 or under and worked with pretty good salary and making the max SSA retirement as is their spouse. They are over the standard $2742 to start with. The Miller Trust or something like them really will come in super useful if your State allows for it.

Read what Igloo572 wrote. See if Miller Trusts are a thing in her state.

Hopefully you know that Medicaid doesn't pay for AL or MC in most states. One needs to medically qualify for LTC or NH/skilled nursing care plus qualify financially. Most states' Medicaid programs have a 5-year look-back period on the financial application. Most facilities' Medicaid beds means that your LO will be in shared room.

You can talk to a Medicaid Planner for her home state, which may be more fruitful than a CELA (certified elder law attorney). Usually a CELA will be able to recommend Medicaid Planners that you can call.

This is a question that many seniors are facing today! You almost feel "guilty" for having the non-qualifying income that you do. Especially when you see many "lower income" seniors qualifying for MANY benefits (i.e nursing homes) over and over. However, there is nothing you can do about it. If you have no family to support you, little assets, and are elderly, your future looks bleak and scary. I read that there is a higher percentage of seniors committing suicide nowadays. America does not have controlled state healthcare like many other countries. Seniors are last (if at all) on the list with our government. A sad reality to swallow.

This doesn’t help with your mother’s situation because of the Medicaid look-back period, but it can with your own.

Trusts are not limited to the wealthy. Setting up a medicare asset protection trust (MAPT) is one way of getting qualified.

An MAPT allows a person to qualify for long term care benefits from Medicaid, while protecting assets from being depleted if long-term care is needed.

I’m the caregiver for my 85 yo dad. He can’t qualify for Medicaid subsidies in a nursing home, and like your mom, he doesn’t have enough to pay out of pocket. This experience has taught me to listen to my financial planner. He’s mentioned setting up a trust for a couple years. I didn’t understand until I tried to get my dad into a care facility.

I’m in my early 60s with no children. My retirement will be comfortable but I know I can’t afford 8k a month, and who knows what the cost will be by the time I need one.

I’m setting up appointments to move assets to medicare trust in early 2024. It’s scary because there are drawbacks to any type I choose. It will be the cost I pay for peace of mind.

https://www.fidelity.com/learning-center/wealth-management-insights/understanding-medicaid-trusts

Medicaid is incredibly State-specific. See a Medicaid planner in your parent's state.

https://www.agingcare.com/discussions/medicaid-planning-484793.htm?orderby=recent