Assisted Living - Income Cap

As long as I have been a practicing elder law attorney, I have advocated for clients in nursing facilities. However, over the last two years more and more clients have come to me seeking advice regarding Assisted Living facilities.

I attribute the shift in client needs to three factors 1) the proliferation of Assisted Living facilities in New Jersey, 2) the substantial lack of regulation of Assisted Living facilities, and 3) baby boomers entering the Assisted Living communities. My greatest concern for any person entering an Assisted Living facility is their long term financing plan. Many facilities have a formal or informal requirement that a patient pay for at least 2 years before receiving Medicaid benefits. However, for numerous reasons, paying for 2 years does not necessarily mean that the patient will get the Medicaid benefit.

Medicaid home care benefits (which include assisted living benefits) are subject to a monthly income cap of $2,094. That means a person whose monthly fixed income exceeds $2,094.00 cannot get Medicaid benefits in an Assisted Living facility under current law. This is not true in a nursing home environment. As a result of the income cap, many Assisted Living patients have no choice but to go to a nursing home when they run out of private pay funds. However, there may be good news on the income cap front. Last week I attended the 14th annual Elder Law Retreat. A decision maker with State was in attendance. She advised the lawyers present that the State has requested the federal government to allow a "waiver" of the income cap. Even though the State plan has not been finalized, but the current proposal individuals with income over the cap can get Medicaid home care and Assisted Living services by paying a premium equal to the difference between their fixed income and the current cap of $2,094. So, for example, if I have monthly fixed income of $3,000.00, I would pay a monthly premium of $906.00 and I would then be eligible for Medicaid. We do not know who the premium will be paid to, but this issue should be resolved in July of 2012.