Legal expert at Fairfax Area Agency on Aging webinar: Medicare covers acute care; Medicaid is the main payer for long-term care

Lisa Pratt, a staff attorney at Legal Services of Northern Virginia, told a Fairfax Area Agency on Aging webinar that Medicare generally does not cover long‑term custodial care and that Medicaid is the primary payer for nursing‑home and other long‑term services.

“Medicare is designed to cover acute care … it doesn’t pay for long‑term custodial care,” Pratt said, adding that Medicare covers some skilled nursing services only for a limited period after a qualified hospital stay. She said Medicaid — and in Virginia the Commonwealth Coordinated Care Plus (CC Plus) waiver — are the programs caregivers should look to for long‑term supports and services.

Why this matters: caregivers and families commonly assume Medicare will pay for nursing‑home stays or long‑term home care. Pratt said misunderstanding program rules can lead to costly mistakes and recommended early planning to protect both care and finances.

Pratt described main options for long‑term care in Virginia. Medicaid covers institutional care (nursing homes) and, through the CC Plus waiver, can also pay for home‑based services for people who meet nursing‑home level‑of‑care criteria. “Medicaid is the primary payer for long‑term care in the United States,” she said. Services under a waiver can include personal care (bathing, dressing), respite for primary caregivers and certain home modifications.

She walked through how eligibility works: the local Department of Social Services conducts a uniform assessment to evaluate functional ability (activities of daily living), medical or nursing needs, and whether a person is at risk of nursing‑home placement within 30 days. Financial eligibility is a separate step; Virginia sets income and resource limits that are adjusted annually.

On spend‑downs and transfers, Pratt emphasized careful use of assets. Applicants whose countable assets exceed the limit can either spend down on permitted items or qualify as medically needy with an income spenddown. “You can’t just give it away,” she said, warning that gifts or sales below fair market value can trigger Medicaid’s five‑year lookback and a penalty period. She explained the penalty is calculated by dividing the value of improper transfers by an average monthly nursing‑home cost.

Pratt also explained patient pay (patient liability) once someone is approved for Medicaid: the department calculates allowable deductions and the remaining income is applied toward nursing‑home costs; recipients keep a small personal‑needs allowance. CC Plus recipients who remain at home generally retain a higher maintenance needs allowance to cover rent, utilities and groceries.

Protections for a community spouse were described: when one spouse is institutionalized, asset and income rules preserve a resource allowance and a monthly maintenance amount for the spouse remaining in the community. Pratt noted that Virginia is required by federal law to seek estate recovery after a Medicaid recipient dies, although recovery generally occurs after a surviving spouse’s death and exemptions exist for hardship cases and certain dependents.

Pratt urged caregivers to document transactions carefully for the five‑year lookback and to keep bank statements and records showing loans versus gifts. She recommended powers of attorney (medical and financial) to avoid guardianship procedures and suggested consulting an elder‑law or trust attorney about irrevocable trusts for asset protection, noting that typical revocable living trusts do not protect assets for Medicaid purposes.

On appeals, Pratt said applicants have the right to challenge many determinations — medical need, financial eligibility, spenddown calculations, five‑year lookback findings, patient‑pay determinations and service reductions — and can request a fair hearing before an impartial officer. She described the fair hearing as a de novo review that may uphold, reverse or remand a decision and recommended legal representation for appeals.

During the Q&A, Pratt answered common caregiver questions: mistakes that jeopardize coverage (improper transfers, failing to respond to DSS requests, not submitting spenddown documentation), joint bank accounts and how DSS treats joint assets, prenups (she advised not to rely on a prenup to override Medicaid rules), and where to turn for concerns about at‑home care quality (ombudsman and adult protective services). On tax questions about waiver payments and other specialized legal issues, she recommended consulting tax professionals or taking an individualized intake at Legal Services of Northern Virginia.

The webinar concluded with a reminder that the session was recorded and slides would be shared, and an announcement for the next webinar in the series.