Does a simple Google search for Medicaid guidance feel like gibberish? That is a common sentiment echoed by people like you who are looking for a clear understanding of Medicaid.
The following article provides a brief explanation of various Medicaid terms without going into the finer details. These explanations should be used as a basic reference; they are in no way intended as financial or legal advice. Senior Planning Services can assist you with a more in-depth understanding.
Activities of Daily Living (ADL) – In order for Medicaid to cover long-term care, the level of assistance one needs with activities of daily living (ADLs), i.e., bathing, dressing, eating, etc., will be assessed.
Asset Limit – The maximum amount of assets allowed in order to qualify for Medicaid eligibility. This includes cash, bank accounts, life insurance, etc. See the Asset Allowances tool on our website for more details.
Cash Surrender Value – The value of a life insurance policy once it is surrendered. This amount may be counted by Medicaid as an asset.
Community Spouse Resource Allowance (CSRA) – The amount of countable assets a spouse is allowed to hold without disqualifying the other spouse from Medicaid
Estate Recovery – Medicaid will try to recover the costs of paid long-term care services from the estates of Medicaid beneficiaries.
Income Limit – The maximum amount of income one is allowed to receive in order to qualify for Medicaid eligibility. This includes Social Security, pensions, annuity etc. See the Medicaid website for more details.
Prepaid Funeral- A funeral arrangement that has been set up in advance. In some states, Medicaid allows for one to be set up as part of spend down. Read our article on Prepaid Funerals.
Look Back Period- Medicaid will review the history of one’s assets in order to ensure that no funds were gifted or transferred in order to be eligible for Medicaid. The length of time varies by state.
Minimum Maintenance Needs Allowance (MMNA)- The minimum amount of income that a community spouse can keep in order to avoid impoverishment while the spouse is in a nursing home (see spousal maintenance allowance).
Penalty Period- A period of time that Medicaid may require one to pay privately for a nursing home stay, as a penalty for transferring funds within the lookback period.
Personal Needs Allowance (PNA)– The monthly sum of money that Medicaid recipients may retain from their personal income. These funds need to be used for the resident’s benefit.
QIT- Qualified Income Trust (QIT)- (aka Miller Trust) A special legal arrangement for holding income if it exceeds the Medicaid income limit. The income deposited into this dedicated bank account is disregarded when determining financial eligibility for Medicaid. Income in this trust can be used for specific approved needs.
Skilled Nursing Facility (SNF)- Otherwise known as nursing home
Special Needs Trust- A legal arrangement and fiduciary relationship that allows a disabled person to receive income without reducing their eligibility for public assistance.
Spend Down- The time period when assets are spent on personal care in order to qualify for Medicaid. Read more about the Medicaid spend down process here.
Spousal Maintenance Allowance- The amount of income the community spouse may keep for shelter-related expenses if the couple’s combined income falls below the MMNA (see above). There is a maximum and minimum which varies by state. In some states the monthly shelter bills must be submitted in order for Medicaid to determine this allowance.
Senior Planning Services is a Medicaid application company that can assist you with all your questions during this overwhelming time of your life. Senior Planning Services handles all the details of the application process, leaving you with peace of mind and approval in hand. Contact us at (732) 961-8430 for a free consultation.