It is a very common misperception that Medicaid is only available for individuals in a nursing home. Community Medicaid is Medicaid assistance for those individuals who want to stay at home but need additional care and services. The qualification procedure for community Medicaid is different and more relaxed than for Medicaid in a residential facility. For example, instead of the five year transfer penalty, you can transfer assets out of your name in one month, and apply to qualify for Community Medicaid the following month. So, for those individuals who do not have a long term care plan in place, they may be able to transfer assets to an individual or an irrevocable trust in March and apply for benefits in April. The resource and income levels for the applicants are also different for home care than for residential Medicaid applicants.
Many individuals want to stay in their own home, but believe they must pay for all care received in the home, including personal care services, assistance with medications, meals and other needs. Some individuals would be able to stay in their home, if they have just a few hours a day of assistance. Ultimately, home care should be preferred from a state cost perspective, as nursing home costs are far more expensive than other types of care. There are many people who believe they must have enough money to pay for their home care. One of the benefits of private pay home care over Medicaid paid home care is that the individual and the family determine the number of hours needed on a daily basis, and are instrumental in choosing and researching any individual who comes into their home. It is often frightening for the elderly to open their home to unfamiliar caretakers. If they want to pick their own home care workers, they would have to pay for these workers. If these persons were found incapable or unsatisfactory, they could easily be replaced by another caretaker if they were private pay. However, there are waiver programs under the Medicaid umbrella which allow for more flexibility and choice if you qualify and are accepted.
If the individual needing care is paying for a caretaker privately, it is extremely important to speak with a tax professional regarding how the caretaker is paid. It obviously depends on how many hours the caretaker is in the home and what type of work they perform, but there are many considerations, such as vacation and sick pay, overtime pay, workplace injury, etc. Sometimes, caretakers are paid by the individuals or their families in cash, without considering tax withholdings, workers compensation and other employer mandates. If a caretaker is not being paid as an employee, but meets all the other necessary criteria, and the tax department or IRS may deem such individual to be an employee under the meaning of employee, any pay to such individual must be according to the law for employees. Obviously, there are individuals who would rather be paid “off the books” and may accept a lesser hourly sum if acceptable to the person paying for the care. However, this is often a much bigger problem down the road than just filing out the necessary forms and creating an employer/employee relationship. One of the dangers is that someone could get injured on the job, perhaps lifting the individual needing the care. If the daughter or son of the individual is responsible for hiring this person, they may be deemed the employer for workers compensation purposes, and may be liable for the injuries.
If you choose home care for a loved one, be aware there are care coordinators, also known as Geriatric Care Managers, who provide enormous assistance to those being cared for in their own home. They can coordinate the schedule of the care takers, medications, medical visits, equipment and many other issues.
Family members or friends caring for the individual may establish a personal service contract between themselves and the patient. Often, family members are the primary caregiver of the individual at home, and there is an acceptable methodology to be compensated for such services.
There are also different income and resource limitations for individuals and couples. If an individual has excess resources, they may transfer the excess to an irrevocable trust, or gift to individuals. If an individual has excess income, they may make use of a pooled trust, where their excess income would be used to pay their necessary expenses. The application for such a pooled trust can be cumbersome, but the payoff is the qualification for Medicaid services even with excess income over the allowable maximum. In order to apply for Community Medicaid, one must first ascertain if they exceed the resource and income thresholds. If there are excess resources and/or income, a plan must be put in place to transfer the resources and deal with the excess income, usually through a pooled trust. After all the transfers and trust is in place, an application for Community Medicaid must be submitted to the local Department of Social Services. The application will be reviewed, and the department may request any further necessary information.
In major metropolitan regions, 24 hour community Medicaid is far more common than in more sparsely populated areas. However, many individuals north of New York City do receive many hours of daily care. Obviously, in cities like New York City, where there is a shortage of nursing home beds, home care becomes a very viable option.