What is Resident / Patient Liability for Medicaid?

Last updated: May 10, 2024
Medicaid Long Term Care | Questions and AnswersCategory: BenefitsWhat is Resident / Patient Liability for Medicaid?
medicaidplanner Staff asked 2 years ago

What is Resident / Patient Liability for Medicaid? How is the Patient Liability to a Skilled Nursing Facility Figured?

1 Answers
medicaidplanner Staff answered 4 years ago

Resident liability, also called patient liability or “share of cost”, is the amount a Medicaid recipient must pay towards the cost of their nursing home care (or in some cases, long-term home and community based services via a Medicaid Waiver). Stated differently, patient liability is the monthly amount that a Medicaid beneficiary must pay from their income before Medicaid will cover the remainder of the costs.

Despite there being a Nursing Home Medicaid income limit, a Medicaid beneficiary must pay nearly all of their monthly income towards the cost of their nursing home care. Patient liability is determined based on one’s monthly income and allowable deductions. A Medicaid recipient in a skilled nursing facility is entitled to a monthly Personal Needs Allowance (approximately $30 to $200, based on the state in which one resides). Other deductions may include a Monthly Maintenance Needs Allowance, which is an income allowance for a non-applicant spouse (if applicable), Medicare premiums, and medical expenses that Medicaid will not cover. One’s monthly patient liability will remain the same each month unless one there has been a change in income or allowable deductions.

As an example, let’s say Fred is a Nursing Home Medicaid beneficiary with a monthly income of $2,000. The state in which he resides allows a $75 / month Personal Needs Allowance and he has a healthy spouse living at home who is entitled to a $1,000 / month Spousal Income Allowance. Therefore, his total allowable deductions are $1,075 / month ($75 for a Personal Needs Allowance and $1,000 for a Spousal Income Allowance). When these deductions are subtracted from his monthly income, it leaves him with a monthly patient liability of $925 / month. ($2,000 in income minus $1,075 in deductions = $925 patient liability).

Being over the income limit for long-term care Medicaid does not necessarily mean that one cannot become eligible for Nursing Home Medicaid (or home and community based services via a Medicaid Waiver). Instead, the resident liability will be greater. Some states are considered Medically Needy States, and in these states, if the cost of nursing home care is less than the calculated patient liability, they will be eligible for Medicaid. Other states allow a Medicaid applicant to become income qualified by depositing “excess” income (income over Medicaid’s income limit) into a Qualified Income Trust (QIT). It is through the QIT that the beneficiary’s patient liability is paid.

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