Dual Eligibility for Medicaid and Veterans Pension Benefits

Overview

Veterans and/or their surviving spouses should always consider both Medicaid and veteran’s pension benefits, such as Aid and Attendance (A&A) or Housebound benefits,  as options when determining how to pay for home care, assisted living, or nursing home care. This is because some benefits are best suited for certain care types and individuals may require changes in care throughout their lifetime. Similarly, the needs of each individual in a marriage may be different. For this reason, one spouse may choose to receive Medicaid assistance while the other uses veteran’s pension benefits.

Comparing Medicaid and Aid & Attendance

There are many factors to consider when deciding on the best program for health care coverage. While this comparison table offers a quick overview, it is important to read the detailed consideration factors below to apply this information to one’s personal situation.

Important Consideration Factors

The type of care a person requires is usually the major deciding factor between choosing to use VA pension benefits or Medicaid benefits for coverage. However, income and asset amounts may also be limiting factors. Married couples may also want to receive benefits from both programs.

Type of Care Needed

Generally speaking, those who require home care or assisted living find it advantageous to use Housebound or Aid and Attendance VA pension benefits. In contrast, those who need nursing home care often find that Medicaid is the better option. Medicaid does cover home care and assisted living care in many states; however, it will not cover the room and board costs of assisted living. Further, policies vary by state and Medicaid services may not be guaranteed.

This is because states may offer benefits through their regular state Medicaid program and/or through special Medicaid waivers. While regular state Medicaid programs are entitlement programs with guaranteed benefits for all who qualify, waivers, typically, are not. This may be problematic when services provided at home or in an assisted living residence are solely (or jointly) covered by waivers, such as Home and Community Based Services (HCBS) Waivers, as is the case in some states. These waivers may be limited to certain areas or require those who qualify to join a waitlist. In contrast, nursing facility services for eligible seniors may not be limited in any way by state Medicaid programs or require a waiting period for covered services. 

While the Aid and Attendance benefit can also be applied toward nursing home care, the maximum benefit amount is far less than the average cost of nursing home care. Medicaid, on the other hand, typically pays all nursing home costs for qualifying individuals. That said, to get Medicaid coverage for nursing home care, individuals must first apply for VA benefits (as well as all other types of available coverage) if they are eligible for them. Regulations require that all other possible sources of coverage are tried before Medicaid will disburse payments.

Those who want to use Medicaid to cover nursing home care and who receive a VA pension should also know that the amount of pension they are entitled to may change. While a married individual with Aid and Attendance benefits who is getting Medicaid-covered nursing care will have no change in his or her pension, single veterans or surviving spouses without dependents who are receiving Medicare-covered nursing care will have their pension benefits reduced to $90 a month.  

Different Policies for Income and Assets

A second major consideration is the amount of income and assets an individual or married couple has. Medicaid and VA pensions have different income and asset limits (with Medicaid’s being much lower) and use different methods for determining what is considered countable. For example, the VA allows applicants to deduct unreimbursed medical expenses from the income added to their net worth which may help them remain under the net worth limit. In this way, those who would not otherwise qualify for pension benefits may still be eligible. Because of these and other factors, one might qualify for Aid and Attendance, but not meet Medicaid requirements. 

It is also important to mention that those who wish to use Medicaid benefits and who also qualify for (and thus must either have or get) a VA pension will not automatically be disqualified due to Medicaid income limits. In fact, most state Medicaid programs do not consider pensions to be countable, and thereby possibly disqualifying, income. However, in some states, a portion of an Aid and Attendance pension may be considered income.

Look Back Rules

There are look back rules for both Medicaid and VA pension programs. The look back rule for the VA is a period of 36-months immediately preceding one’s application in which the VA looks at all transfers during this timeframe. If assets were gifted or sold for less than they are worth, the VA assumes it was done to meet the net worth limit (calculated by adding assets and income). Therefore, a period of ineligibility will be the penalty. 

The look back period works the same for Medicaid, but it has a 60-month time frame . The only exception is California, which has a 30-month look back period for Medicaid. A qualified Medicaid planning professional may be able to assist a veteran in structuring their finances so that they can qualify for either a VA pension or for both Medicaid and VA programs.

Marital Status 

Finally, marital status is also something individuals should take into consideration. One possibility for married couples is for one spouse to apply for and receive Medicaid, while the other applies for and receives the Aid and Attendance benefit. In other words, one spouse would have their nursing home care paid for by Medicaid, while the other spouse would live at home or in an assisted living community and have some, or all of their care costs, paid for by a veteran’s pension in the form of the Monthly Maintenance Needs Allowance or “MMNA”. 

The administrative paperwork necessary for a married couple to be approved for VA pension benefits in addition to Medicaid benefits is complex. It is highly recommended that individuals in these situations consult with a Medicaid planning professional who is also knowledgeable about veterans’ pensions and the Aid and Attendance benefit.

How to Apply

How to apply for Medicaid and/or a veterans pension depends on the applicant’s situation. As these applications are complicated, and the approval time may be lengthy, it is advantageous to get help from an expert with the initial application instead of waiting to seek guidance after an application is rejected.

If the applicant is single and they are certain that they meet all the eligibility requirements, they should contact their local Area Agency on Aging for Medicaid or their local Veterans Service Office for VA Pensions.

If the applicant is married, does not meet the strict eligibility limits or is at all uncertain about their eligibility, they should consult with a Medicaid Planner or Veterans Benefits Planner before application.