NC DHSR: Adult Care Home and Family Care Home Rules

Table of Content

• Mason one of seven N.C. elder law attorneys named to Super Lawyers
• Rules and Regulations
• Nursing Home Rules
• Guidance for Long-Term Care Providers and Facilities
• Adult Care Home and Family Care Home Rules
• North Carolina Medicaid Income & Asset Limits for Nursing Homes & In-Home Long Term Care
• Mason Named 2023 Triad Lawyer of the Year in Elder Law

For additional information on how Medicaid counts income, click here. For Medicaid eligibility purposes, any income that a Medicaid applicant receives is counted. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Holocaust restitution payments and Covid-19 stimulus checks are not counted as income by Medicaid, and therefore, have no impact on Medicaid eligibility.

Mom sets up a trust for daughter that requires assets to be distributed for the “health, education and maintenance” of the daughter. The trusts assets will be countable if daughter needs to go into a nursing home. If the trust was funded with the applicant’s own assets and the applicant is under age 65 at the time the trust is set up, then the trust might qualify as a “self-settled special needs trust”. See a further explanation of special needs trusts on the Mason Law website by clicking HERE. If so, and if the trust was properly designed as a discretionary trust , the assets in the trust will not be countable. Please do not rely upon this simple explanation for a definitive answer.

Mason one of seven N.C. elder law attorneys named to Super Lawyers

As is the case with a tenancy-in-common interest, there may be a Transfer Penalty when the life estate is set up and the Remainder Interest is transferred to the Remainder Interest holder. A tenancy-in-common is a method of holding title to real property jointly with others. Each “tenant in common” has an equal right to use the real property. Upon sale of the real property, the proceeds are divided according to the percentage ownership interests. Each tenancy-in-common interest can be separately sold, transferred as a gift, and passed on under a Will. Do keep in mind, that while the Home does not count for Medicaid qualification purposes, it may likely be subject to estate recovery later after the death of the Medicaid applicant and his or her spouse.

Contrary to popular belief, there is no such a thing as a Medicaid or “nursing home” lien in North Carolina. As a result of these rules there are two important considerations to keep in mind. Planning is tricky and should be undertaken only with expert guidance . Also, if a nursing home stay becomes necessary and there are potential issues with earlier transfers, expert guidance also is essential to repair the situation and devise a strategy.

Rules and Regulations

Note that older adults who are already in need of skilled nursing care will not typically be eligible to sign up for a LTC insurance policy. North Carolina has several organizations that can assist with applying for Medicaid. These services are available for free to help seniors, their loved ones and caregivers navigate the different financial options for paying for nursing homes. North Carolina Administrative Code and regulations from the Centers for Medicare & Medicaid Services that apply to nursing facilities are provided below.

Seniors in long-term care in North Carolina have access to a selection of programs and services that address individual needs and help improve the overall quality of life for seniors. Many of these programs can also delay admittance into a nursing home by enabling seniors to age in place. Resources on this page provides links to applicable rules and regulations, relevant forms for licensees and applicants and steps that must be followed to obtain a license for a home care agency in North Carolina. In fact, Medicaid will pay benefits retroactively as much as 3 months before the date of the application IF the applicant was financially qualified during that retroactive period. The application process can drag on for several months as the local DSS demands more and more verifications regarding such issues as the amount of assets and dates of transfers. If the applicant does not comply with these requests and deadlines on a timely basis, DSS will deny the application.

Nursing Home Rules

In all circumstances, the income of the community spouse will continue undisturbed; he or she will not have to use his or her income to support the nursing home spouse receiving Medicaid benefits. If an applicant transfers real property to a noncountable trust or to another person, of course, there will be a Transfer Penalty. In the example above, if the transfer was made to trust or perhaps a child more than 60 months before the application, there will be no Transfer Penalty. If the transfer was made within 60 months of the application , there will be a 56.26 month Transfer Penalty.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s estate recovery program. Following a long-term care Medicaid beneficiary’s death, North Carolina’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance. Countable assets include cash, stocks, bonds, investments, IRAs, credit union, savings, checking accounts, and real estate in which one does not reside. However, for Medicaid eligibility, there are many assets that are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one’s primary home.

If the applicant and a spouse own more than one automobile, then the most valuable auto does not count, but other autos will be countable. Historically there had been much confusion with respect to whether the joint tenancy interests had to be equal. Fortunately, recent legislation clarifies that joint tenancy interests need not be equal. Setting up a joint tenancy with one share being 99% and another being 1% would be as valid as setting up two 50% interests.

The General Assembly enacted “hardship rules” that would allow qualification of a person for Medicaid and allow a Community Spouse to retain a certain level of assets even if DSS imposes a transfer sanction on an earlier transfer. When a life estate is set up, the Life Tenant usually transfers the Remainder Interest to another person. The value of the Remainder Interest can be calculated based upon the age of the Life Tenant .

Adult Care Home and Family Care Home Rules

The OAH's Web site, allows you to view both permanent and temporary rules. The N.C. Administrative Code rules are published by the North Carolina Office of Administrative Hearings . Proposed changes to DHSR rules can be found on the Rule Actions page.

Transfer penalties will be discussed in much greater detail below. The “Home” also includes an unlimited amount of real property (subject to the $636,000 equity rule, if applicable). As a result, for all practical purposes, nursing home residents do not have to sell their homes in order to qualify for Medicaid.

The Ombudsman Program assists residents and families in the understanding and exercise of these rights. When a nursing home resident becomes eligible for Medicaid, all of his or her income, less certain deductions, must be paid to the nursing home. The deductions include a $30-a-month personal needs allowance, a deduction for any uncovered medical costs , and, in the case of a married applicant, an allowance he or she must pay to the spouse that continues to live at home. If the couple owned $300,000 in assets, the spouse in need of care would not become eligible until their savings were reduced to $139,400 ($2,000 for the nursing home spouse and the maximum $137,400 for the community spouse).

Within 14 days of a resident's admission, a facility must perform a comprehensive assessment. The facility must also create a comprehensive care plan within seven days of the patient completing the evaluation. The facility must review each resident's comprehensive assessment and care plan every 90 days. The VA Community Care Program is available to men and women who have served in the military and need help from providers outside the standard of care provided by the VA. This service is available when the VA can’t provide the appropriate level of care.

Residents' Rights

All assets of a married couple are considered jointly owned regardless of the long-term care Medicaid program for which one is applying. However, the non-applicant spouse of a Medicaid nursing home or Waiver applicant is permitted a Community Spouse Resource Allowance . In 2022, the community spouse (the non-applicant spouse) can retain 50% of the couples’ joint assets, up to a maximum of $137,400, as the chart indicates above.

In long-term care, Medicaid pays for services including speech and occupational therapy, prescription medications, physician services and personal care, including meals, transportation and grooming. Program participants have the option to self-direct their own care through an option called CAP/Consumer-Directed. This allows beneficiaries to choose their own care providers and allows family members, including adult children and spouses, to be hired as personal caregivers and be paid by the Medicaid program. CAP/Consumer-Directed was previously called Community Alternatives Program for Choice and abbreviated as CAP/Choice. 3) Regular Medicaid / Aged Blind and Disabled – This is an entitlement program; Anyone who meets the eligibility requirements receives assistance. Limited long-term care services, such as personal care assistance or adult day care, may be available.