This year, Georgia increased the amount of money that a nursing home resident receiving Medicaid benefits can keep from their monthly income. As you are aware, Medicaid is a means-tested health insurance program for those with limited income and assets (for a complete discussion on those limits, please click here).
Medicaid’s Cost Share (or Patient Liability)
When a nursing home resident qualifies for Medicaid, Medicaid will pay for most of the cost of the nursing home. The resident, however, still has a cost share (or as we call it, a “Patient Liability”). Each Medicaid beneficiary must pay his/her income to the nursing home with certain exceptions. This means that on a monthly basis, almost all of a nursing home resident’s income goes to the nursing home, and Medicaid pays the rest of the bill. This undoubtedly leaves Medicaid paying the bulk of each month’s expenses, but each resident does share in some of the costs. How much each resident pays depends on the resident’s income.
Medicaid allows only a few expenses to be paid from the resident’s income. These income diversions reduce the patient liability (or how much is paid to the nursing home from the resident) and increases the amount Medicaid pays to the nursing home. These diversions include health insurance premiums, incurred medical expenses, spousal diversions, and a personal needs allowance.
To understand how this works, consider Mr. Wallace. Mr. Wallace qualifies for Medicaid and has an income of $4,200. He also has a wife living who still lives at home. She has an income of $1,800. He has health insurance premiums of $200/month. How much is Mr. Wallace’s patient liability?
Mrs. Wallace is entitled to keep $1,290 of Mr. Wallace’s income (this amount plus her income of $1,800 gives her the maximum monthly maintenance needs allowance of $3,090). He also gets to pay for his $200 health insurance premiums, and he gets to keep $65 for his personal needs allowance. This means that of his $4,200 income, $2,645 will be paid to the nursing home; and Medicaid will pay the remaining balance at the nursing home each month.
The Personal Needs Allowance
The final expense Mr. Wallace was allowed to pay out of his income was the $65 for his personal needs allowance. This is the amount of money that Georgia allows each Medicaid beneficiary to keep to pay for those items that Medicaid does not pay for (e.g., haircuts, clothing, cell phones, etc.). For years this amount was capped at $50/month. As of July 1, 2018, that amount is now $65/month. Not much, but it’s better than nothing.
If you have questions about Medicaid and the patient liability, please contact our office at firstname.lastname@example.org or 404-843-0121.