A Tale of Two States – Comparison of New Jersey and Pennsylvania Medicaid Eligibility Rules
Our elder and disability law office has offices in both New Jersey and Pennsylvania. Therefore, it is common for a family to consult with our office that has a parent residing in Pennsylvania, and a child in New Jersey, or vice versa. In many of these cases, the family is inquiring about what state they should look to for potential placement of their loved one in a long-term care setting. Our job is to analyze their assets, income, medical needs, and the family’s goals to recommend whether New Jersey or Pennsylvania is the better long-term care setting. The following Medicaid rules should be taken into consideration when considering New Jersey vs. Pennsylvania long-term care placement:
- Assisted Living – In Pennsylvania, there is no Medicaid eligibility in an assisted living or personal care community. However, in New Jersey, there is the potential for Medicaid eligibility. Most assisted living communities in New Jersey that accept Medicaid require at least two years of private payment prior to Medicaid eligibility. Therefore, if assets combined with income are relatively limited, I typically recommend that family consider placement in New Jersey in order to be in the position to remain in a less restricted assisted living setting after two years of private pay.
- Healthy Spouse’s Retirement Plan – In Pennsylvania, the non-Medicaid applicant spouse’s qualified retirement plan is a non-countable asset in determining Medicaid eligibility for the ill spouse. A retirement plan may consist of an IRA, SIMPLE IRA, 401K, 403B, or Keogh plan. In contrast, in New Jersey, the healthy spouse’s qualified retirement plan is countable for Medicaid eligibility. Therefore, if the healthy spouse has a sizable retirement plan, the family may want to consider nursing home placement in Pennsylvania so that the healthy spouse does not need to spend down the qualified retirement plan in order to qualify the other spouse for Medicaid eligibility.
- Medicaid Income Cap – In Pennsylvania, if the Medicaid applicant has fixed monthly income over $2,199, the applicant is not eligible for home and community based Medicaid services, including home care and/or adult medical day care. In New Jersey, as of December 1, 2014, excess monthly income above $2,199 per month cap is not a bar to Medicaid eligibility. The excess income above the $2,199 cap can be deposited into a Qualified Income Trust (QIT) in order to become eligible for Medicaid home & community based programs.
- Planning With Home – In Pennsylvania, as long as a Medicaid applicant who owns a home expressed an intent to return to the primary residence, the primary residence remains an exempt asset for Medicaid eligibility. In New Jersey, however, generally, if there is no spouse residing in the home, the Medicaid applicant’s home is treated as a countable asset for Medicaid eligibility. The home would need to be listed for sale in order to become eligible for Medicaid, and then the sale proceeds spent down.
There are also other factors to consider. These additional factors include the ability of a spouse to visit their loved one in another state as well as location of other caregivers. It is important to consider both the financial situation as well as family dynamics in determining whether New Jersey or Pennsylvania is the suitable state of placement. Our office assists our clients and their caregiver loved ones in designing the financial long-term care plan as well as determining the proper housing in either New Jersey or Pennsylvania.