Medicare-Medicaid Pay-Down of Assets
State law and regulations impose income and asset limits on persons applying for Medicaid.
The income limit for the institutional Medicaid program and certain home and community-based waiver programs is determined by the Department of Human Services – Division of Medical Assistance and Health Services. An individual may be eligible for SSI in New Jersey if his/her gross monthly income is equal to or less than $998.25 or $1,473.35 for a couple (the first $20 per month of income is excluded). The current resource maximum for an individual is $2,000 and $3,000 for a couple.
Additionally, an individual determined clinically eligible for a skilled nursing facility by the Division of Aging Services qualifies at a higher income limit of $2,901 per month for a single person with a resource maximum of $2,000.
The five-year lookback on all resources is done according to federal regulations. The lookback period checks for any resources that may have been transferred for less than fair market value during the previous five years. Examples of accounts and transactions include:
- Checking Accounts
- Money Market Accounts
- Savings Accounts
- Any Transfers/Sales (money or real estate)
- Credit Union Shares/Accounts
- Investment Accounts
- Life Insurance Policies
Finally, individuals may utilize a Qualified Income Trust (QIT), also known as a Miller Trust, which is a special legal arrangement for holding a person’s income. Individuals with monthly income above the Medicaid Only institutional income limit ($2,349 per month) must establish a QIT if they meet an institutional level of care and are trying to obtain Medicaid eligibility for Long Term Services and Supports.
In determining the resource eligibility of the institutionalized spouse, the community spouse’s share of the resources is subtracted from couple’s total combined resources as of the first moment of the first day of the month of application for Medicaid. If the remaining resources are less than or equal to $ 2,000, the institutionalized spouse is resource eligible. If the remaining resources exceed $ 2,000, eligibility may not be established. To the extent that the community spouse’s share of the combined resources are not already owned by the community spouse, the ownership of the community spouse’s share of the resources must be transferred to the community spouse within 90 days of a determination of eligibility for institutional Medicaid services. The CWA may extend the transfer period if individual circumstances warrant a longer period to affect the transfer. Resources not transferred by the end of the 90-day period (or extension) shall be counted in the determination of eligibility for the institutionalized individual.
An individual shall be ineligible for institutional level services through the Medicaid program if he or she (or his or her spouse) has disposed of assets at less than fair market value at any time during or after the 60-month period immediately before:
1.In the case of an individual who is already eligible for Medicaid benefits, the date the individual becomes an institutionalized individual; or
2.In the case of an individual not already eligible for Medicaid benefits, the date the individual applies for Medicaid as an institutionalized individual.
Fair-market value shall be an estimate of the value of an asset, based on generally available market information, if sold at the prevailing price at the time it was actually transferred. Value shall be based on the criteria for evaluating assets as found in N.J.A.C. 10:71-4.1(d).
The look-back period shall be 60 months.
i. In the case of an individual who is already eligible for Medicaid benefits, the lookback period shall be the 60-month period prior to the date the individual becomes institutionalized.
ii. In the case of an individual not already eligible for Medicaid benefits, the lookback period shall be the 60-month period prior to the date the individual applied for Medicaid as an institutionalized individual.
iii. When a portion of a trust is treated as a transfer, the look-back period shall be 60 months from the date the individual applied for Medicaid as an institutionalized individual, or for a non-institutionalized individual, the date the individual applied for Medicaid, or, if the date the transfer was made is later, then the date the transfer was made.
iv. Penalties of ineligibility shall be assessed for transfers which take place during or after the look-back period. Periods of ineligibility cannot be imposed for resource transfers which take place prior to the look-back period.
Department of Human Services – Division of Medical Assistance and Health Services
N.J. Admin. Code §§ 10:71-3.14
10:71-4.5
10:71-4.8
10:71-4.10