Medicaid for Dementia Care in New Jersey

For many people, the rising costs associated with healthcare and elder care have raised questions about Medicaid and what it covers. Frequently, our clients ask us if Medicaid will pay for the care they need or that a loved one needs. They may also have questions about Medicaid requirements, “spending down” for eligibility requirements, and other associated financial issues.

If you or a family member needs assistance with New Jersey Medicaid dementia care, the Van Dyck Law Group is always available for a consultation. We’ll answer your questions about Medicaid, memory care, estate planning, and related issues so you can make an informed decision. When you’re ready to proceed, we’re always happy to assist you with the necessary forms and paperwork.

Understanding Medicaid Memory Care Benefits

If you or someone you love has been diagnosed with dementia, you may have heard the term “memory care.” But what does it mean?

Memory care is a distinct type of long-term care designed to meet the unique needs of people living with Alzheimer’s disease, dementia, or other cognitive difficulties. It includes a variety of services, such as:

• Maintaining a consistent schedule to reduce confusion, which is common in dementia patients.
• Medication management.
• Providing security measures to ensure the patient doesn’t wander (also common with dementia).
• Cognitive therapies to improve function.
• Cleaning, laundry, and other housekeeping as needed.
• Activities and socialization.
• Help with daily living tasks, including hygiene activities the patient can’t perform, such as bathing or shaving.

Depending on the situation, memory care services may be provided in a dedicated memory care center or as a specialized section within an assisted living community or nursing home. These facilities must use appropriate safety protocols for patients with dementia and offer assistance with daily living as needed.

Unfortunately, because memory care services involve a higher level of care than typical nursing home services, they are also more expensive. In fact, the average cost is just under $7,900 per month, or approximately $95,000 per year. As a result, many families have concerns about how to afford these costs.

Does Medicaid Cover Dementia Care in New Jersey?

This is one of the most common questions we receive, and unfortunately, the answer isn’t simple. In many cases, yes, Medicaid will cover dementia care, but there are some restrictions.

Medicaid is a federal and state program designed to provide health insurance to people with low incomes. It’s sometimes confused with Medicare, which is a similar program specifically for adults who are 65 and older, and sometimes, other adults with disabilities.

Nursing Home and Assisted Living Coverage

In some situations, Medicaid will pay for 100 percent of nursing home care for an adult with Alzheimer’s or a dementia diagnosis who has been deemed eligible. (We’ll discuss eligibility a little later in this article.) This includes medication, therapies, or other treatments delivered in the facility.

However, there are some downsides. If you are eligible for Medicaid, your options for choosing a nursing home facility are limited to Medicaid-certified facilities and other facilities that work with Medicaid. If you prefer a specific care facility that doesn’t work with Medicaid, you may need to find alternative funding.

Does Medicaid Cover In-Home Care for Dementia?

This is another question with a complex answer. The state has “waiver” programs that cover some types of in-home care, but these programs are not always easy to access. If your income is over a certain amount, you might need to have a specific type of trust set up before you can access in-home care from Medicaid.

Additionally, Medicaid may not initially approve you for the amount of care you need. Some individuals may need to submit multiple appeals before they can receive the appropriate care.

For these reasons, we recommend consulting with an experienced elder law attorney if you wish to utilize Medicaid services at home. We can help ensure you meet eligibility requirements, set up a trust if necessary, and, in some situations, appeal your case if Medicaid does not approve the assistance you need.

Dementia Medicaid Eligibility Requirements

Each state has its own Medicaid eligibility requirements. New Jersey’s Medicaid program, NJ FamilyCare, requires applicants to meet certain income requirements, which are subject to change. Currently, adults between the ages of 19 and 64 with an income at or below 138 percent of the Federal Poverty Level (FPL) typically qualify. There is a separate program called NJ FamilyCare Aged, Blind, and Disabled for those who are over 65 or meet certain disability criteria.

People diagnosed with dementia usually need long-term care services (such as a nursing home or in-home care), and the Medicaid requirements for long-term care situations are more complicated. Aside from income limits, patients are expected to liquidate all non-exempt assets to help cover the cost of their care. This process is sometimes called “spending down” assets.

Income and assets that might interfere with Medicaid eligibility over a certain amount include:

• Social security income or a pension
• In some cases, a spouse’s income
• Workers’ Compensation or disability compensation
• Alimony or child support
• Investment interest
• Unemployment or veterans’ benefits
• Inheritances
• Gifts
• Money in bank accounts, trust funds, and investment accounts (like a 401K)
• Property other than a permanent residence
• Some life insurance policies
• Unused vehicles
• Some personal items or valuables

Those who do not currently meet eligibility requirements are often encouraged to “spend down” these assets or income, typically by paying for their own medical care until they run out of funding. However, many people have concerns because they prefer not to exhaust their retirement savings. The situation can become even more complicated if the dementia patient has a spouse who is also dependent on shared income or assets.

Additionally, the New Jersey Division of Medical Assistance and Health Services (DMAHS) can seek to recover some of the money spent on long-term care from the Medicaid patient’s estate. In other words, they can place a lien on the patient’s property and attempt to recover from the estate after the patient’s passing.

As you might imagine, these rules cause concern for many elderly people who can’t afford to pay for long-term care on their own, but still hope to leave some assets to their spouse, children, or other relatives. If you or a loved one is in this situation, your next step should be to consult an experienced elder law attorney. Depending on the circumstances, we may be able to help you protect some of your assets while meeting Medicaid eligibility requirements by setting up a specific type of trust.

How Should You Prepare for an Attorney Consultation About Medicaid Dementia Care?

It will be helpful for your attorney to have a clear picture of your finances and assets, as this will help us determine your eligibility for Medicaid. We also like to learn about your goals for the future, so we may ask you some of the following questions:

• Have you already applied for Medicaid and Social Security? This gives us a starting point. If you haven’t applied already, we can assist you with the application process. If you have applied, we can continue to assist you with the process and help with an appeal if applicable.
• Do you know where you want to live? Some people have already looked at facilities and have a specific one in mind. Others may prefer to stay in their own homes with assistance for as long as possible.
• Are there assets you would like to keep in the family, if possible? We’ll work to find the best solution for your goals.
• Have you selected a loved one to make decisions if you become incapacitated? This can be a hard question for many people, but unfortunately, it’s a necessary one if you have been diagnosed with dementia. In addition to assisting you with Medicaid matters, we also want to ensure that when the time comes, someone you trust will be able to make medical or financial decisions as needed. We can answer your questions and assist you with power-of-attorney paperwork.

Medicaid Dementia FAQ

What If You Sell or Transfer Some of Your Assets Before Applying for Medicaid?

Do not attempt to transfer any assets until you speak with a qualified elder law attorney. While there are certain ways to transfer assets and maintain eligibility, moving assets in other ways can complicate your situation.

In some cases, you may not be eligible for Medicaid if assets have been incorrectly transferred. Your attorney will learn about your situation, explain the available options, and help you take the appropriate steps so you can avoid potential difficulties.

What If You Don’t Qualify for Medicaid Memory Care?

First, you should speak with an attorney to make sure you don’t qualify. Applying for Medicaid is not an easy process, and sometimes, paperwork errors or confusion can result in a patient being rejected when they should qualify.

Medicaid forms can be confusing, especially for elderly individuals who may have low vision, memory issues, or other issues that make the process more challenging. It can be easy to make a mistake, even with assistance from a relative.

For these reasons, your elder law attorney will go over the eligibility requirements and help you determine if you should qualify for dementia care coverage. If this is the case, we may be able to appeal your denial.

If it turns out you do not qualify for Medicaid, we’ll help you ascertain what other options are available to pay for your long-term care services. As discussed earlier, you may qualify in the future after spending down or transferring assets in specific ways.

Sometimes, Medicare or private insurance may pay for some of your expenses. In other situations, you might be able to liquidate some of your assets or preserve others in a trust, then meet the requirements.

Are There Additional Costs Not Included in Memory Care?

A nursing home typically provides meals to patients, but often does not cover personal care items, grooming, hair care, internet, cable, or phone costs.

Learn More About Dementia Medicaid Eligibility With Our Dementia Care Lawyers

At Van Dyck Law Group, our knowledgeable elder law attorneys are ready to guide you through your options, address your concerns, and prepare the legal documents that reflect your decisions. We understand how overwhelming a dementia diagnosis can be, and we’re committed to providing support and clarity every step of the way.

If you or a loved one is facing questions about legal planning related to dementia or you need assistance with estate planning, call Van Dyck Law Group at (609) 293-2621 for help.