Nebraska Medicaid Planning: What Families Need to Know

Nebraska Medicaid can pay for nursing-home care once a person meets the state's resource and income rules. The Nebraska Department of Health and Human Services looks back 60 months at gifts and transfers, lets a spouse at home reserve part of the couple's resources, and may seek repayment from the recipient's estate after death.

Most people facing a nursing-home admission in Nebraska come to these rules in the middle of something hard: a father who can no longer live safely alone in Kearney, a wife whose care in Lincoln now takes more than one person can give, a hospital discharge planner in Omaha asking where a parent will go next. The questions arrive all at once. What does Nebraska count, what does the spouse at home keep, what happens to the house, and what about the money given to the children three years ago? This page sets out what Nebraska's own rules state and where the answer depends on the state's current figures.

What Nebraska Medicaid Covers for Long-Term Care

Nebraska's Medicaid program is run by the Nebraska Department of Health and Human Services (DHHS) under the state's Medical Assistance Act, and DHHS publishes its eligibility rules as Title 477, Medicaid Eligibility. The same rules apply to a family in Grand Island as to one in Bellevue or Norfolk.

For long-term care, the rules that matter most are the ones for people who are aged, blind or disabled, the medically needy rules, and the Spousal Impoverishment Medicaid Program (SIMP) for married couples. Nebraska's look-back rule applies when a person applies for Medicaid while in what DHHS calls a "specified living arrangement," such as a nursing facility.

Home- and community-based services are care provided at home or in the community rather than in a nursing facility. Whether these services, and any particular program offering them, are available for a given person depends on Nebraska's current rules, which this page does not set out by program name.

Eligibility turns on the difference between a countable asset, which is something Medicaid counts toward the resource limit, such as a bank account, and an exempt asset, which Medicaid leaves out of the count.

This page covers Medicaid for long-term care only. It does not cover Medicare, private long-term-care insurance or veterans' benefits.

Nebraska Medicaid Eligibility: Asset and Income Rules

Nebraska's resource rules for non-MAGI programs, the programs that cover people who are aged, blind or disabled, list resource amounts of $4,000 for a one-member unit, $6,000 for a two-member unit or family, $6,025 for a three-member unit or family, and $25 more for each additional individual (Title 477, Chapter 23, version read in 2023, last amended October 4, 2020). For a married person in a nursing home, the spousal rules separately require $4,000 or less in countable resources.

The home. Nebraska defines the home as any shelter a person owns and uses as a principal residence, including the land under the house and related outbuildings needed to run the home. For applications on or after January 1, 2006, a person is not eligible for any long-term-care services if the equity in the home exceeds the amount listed in the Title 477 appendix. A lot next to the home counts as available if it can be sold separately. It is exempt if the case record documents that it cannot be sold because of its location or condition. Under the federal framework, the home-equity limit does not bar coverage when a spouse, a child under 21 or a blind or disabled child lives in the home.

Nebraska's treatment of a vehicle, personal belongings and burial arrangements depends on its current rules.

Income. Nebraska has a medically needy category. A person whose income is above the standard for another category must incur medical expenses each month at least equal to the difference between income and the applicable standard. The rules describe this as a share of cost obligation that varies with household size and income, and state that each month is determined separately and continuous eligibility does not apply (Title 477, Chapter 27, effective September 28, 2021). The share of cost concerns monthly income. It is different from spending down assets to the resource limit.

Some states use income-only trusts, often called Miller trusts or qualified income trusts, for people whose income is too high to qualify. Nebraska's rules cited here describe the medically needy share of cost instead; whether any income-trust arrangement plays a role in Nebraska depends on the state's current rules.

The Look-Back Period and Transfer Penalties in Nebraska

The look-back period is the window before an application in which DHHS reviews gifts and other transfers. For transfers on or after February 8, 2006, Nebraska's rule directs DHHS to look back 60 months before the month of application to decide whether the applicant or spouse gave away a resource in order to qualify.

The look-back is triggered when a person first applies while in a specified living arrangement, or when a person already on Medicaid enters one. If a person applies more than once, the period runs from the first date both conditions were met. The federal look-back is also 60 months for transfers on or after February 8, 2006.

A penalty period is a stretch of time when Medicaid will not pay for long-term care because something was given away for less than its value. Nebraska divides the countable value of the transferred resource by the actual monthly private-pay cost of care in the specified living arrangement. If both spouses apply and are eligible, the period is split equally between them. Under the federal rule, a penalty starts on the later of the month of the transfer and the date the person is eligible and would otherwise be receiving institutional-level care. A gift made four years ago and a gift made last month are penalized the same way if both fall inside the window.

Federal law states that a transfer to the person's spouse carries no transfer penalty. Other exceptions exist, and how they apply depends on Nebraska's current rules.

Spousal Protections: What the Community Spouse Keeps in Nebraska

The community spouse is the husband or wife who stays at home while the other spouse receives care in an institution. When a wife enters a nursing home in Omaha and her husband stays in their house, the federal spousal-impoverishment law, 42 U.S.C. § 1396r-5, sets the framework Nebraska applies through SIMP.

Under that statute, a couple's resources are totaled as of the start of the first continuous period of institutionalization. Each spouse's share is half of that total. Either spouse may ask the state to assess and document the total. After the month the institutionalized spouse is found eligible, the community spouse's resources are no longer counted against the institutionalized spouse.

Community spouse resource allowance. This is the share of the couple's countable resources the spouse at home may keep. Nebraska's rules state that the community spouse may reserve up to half of the couple's combined resources, subject to a minimum and a maximum. The minimum may always be reserved, even if the combined resources are below it. The community spouse may not reserve more than the maximum. Both amounts are the ones in effect on the assessment date and are adjusted annually by the consumer price index (Title 477, Chapter 26, effective July 29, 2020). The institutionalized spouse may transfer resources to the community spouse without penalty, up to the amount reserved on form IM-73. The current figures depend on Nebraska's current rules.

Monthly maintenance needs allowance. This is the amount of monthly income the spouse at home is allowed. Depending on the community spouse's own income, part of the institutionalized spouse's income may be set aside for it. Federally, the minimum allowance changes each July 1. Nebraska's figure, and whether Nebraska allows a spousal refusal, depend on Nebraska's current rules.

Medicaid Planning Tools Nebraska Families Use

Planning choices in Nebraska turn on the same DHHS rules whether a family lives in Lincoln, Norfolk or a ranch far from either. What fits depends on the family's assets, dates and care needs.

Spend-down. This means lowering countable resources to the limit by paying for care and other allowed expenses, or by converting countable assets into exempt ones. An example is home repairs, subject to the home-equity rule.

Trusts. According to federal guidance on Medicaid eligibility policy, a trust funded with at least some of the person's money can be considered available to the person when eligibility is decided. This applies to a trust set up by the person, the spouse or anyone acting for the person. Placing assets in an irrevocable trust is also a transfer that the look-back reviews. Whether a trust protects anything depends on its terms, its timing and Nebraska's current rules.

Annuities. An annuity converts a lump sum into a stream of payments. How Nebraska treats one depends on its terms and the state's current rules. No annuity protects assets in every case.

Transfers to a spouse. Transfers to a spouse are described in the spousal section above. Every asset and transfer must be reported accurately on an application. The rules for planning work only when the facts are disclosed.

Families comparing neighbouring programs can read about Iowa Medicaid planning or Kansas Medicaid planning. Each state's figures differ.

Nebraska Estate Recovery: What Happens After a Medicaid Recipient Dies

Estate recovery is the state's claim for repayment from a deceased recipient's estate for Medicaid paid during life. Federally, 42 U.S.C. § 1396p(b)(1) requires recovery for people 55 or older, covering nursing-facility services, home- and community-based services, and related hospital and prescription-drug services. States have the option to recover for other services.

Nebraska's statute creates a debt when one of two conditions is met:

• the recipient was 55 or older when the assistance was provided, or
• the recipient lived in a medical institution and could not reasonably have been expected to return home.

The statute defines a medical institution as a nursing facility, an intermediate care facility for persons with developmental disabilities, an assisted-living facility or an inpatient hospital (Nebraska Revised Statutes, recovery of medical assistance, including 2025 amendments). The debt is held in abeyance until the recipient dies. It is then recovered only after the death of any surviving spouse, and only if the recipient is not survived by a child under 21 or a child who is blind or totally and permanently disabled. The department may bring an action within five years after the last of several listed events, including the recipient's death. In a 2017 case, the Nebraska Supreme Court held that recovery can include room and board at nursing facilities.

Federal law, 42 U.S.C. § 1396p(b)(2), likewise defers recovery for a surviving spouse and for these children. A deferral postpones the claim and does not cancel it. Under 42 U.S.C. § 1396p(b)(3), states must have procedures to waive recovery when it would cause undue hardship. Nebraska's statute lets the department waive or compromise its claim, in whole or in part, for undue hardship or when enforcement would not be in the state's best interests. Estate recovery is therefore part of understanding any planning step before it is taken.

Appeals and Legal Help with Nebraska Medicaid

Medicaid planning work under Nebraska's DHHS rules covers resources, transfers, spousal allowances, the application and, where a decision is disputed, appeals. Nebraska gives every applicant the right to a fair hearing, which must be requested within 90 days after the Notice of Action is mailed (Title 477, Chapter 10, effective July 29, 2020).

A request made before the notice's effective date is presumed to ask for ongoing assistance to continue while the appeal is pending. When timely notice was not given, assistance can be reinstated if a hearing is requested within 10 days of receiving the notice, which is treated as five days after the date on the notice. Grounds for appeal include:

• a denied application
• an application not acted on with reasonable promptness
• suspended Medicaid
• reduced services
• a closed case
• services changed to be more restrictive
• an action the person believes was wrong

Medicaid planning and estate planning interact: a transfer or trust used for eligibility also changes what is left in an estate that recovery may reach. The FAQ below sets out how the two differ, and how a healthcare power of attorney fits alongside them.

This site provides information and facilitates inquiries about Medicaid planning for families from Kearney to Omaha.

Discussing Medicaid Planning in Nebraska

Nebraska's rules join several moving parts: a $4,000 resource standard, a spousal reserve tied to the assessment date, a 60-month look-back measured against private-pay rates, and an estate claim that waits for a surviving spouse. A consultation would cover the couple's resources and how they are titled, the dates and amounts of any transfers, the care setting, the home and who lives there, and the family members who would be affected by recovery. This page does not settle any family's facts, and it does not cover other states' rules beyond the comparisons linked above.

To talk through a situation like this with an attorney, including how past gifts fall within the 60-month look-back or how a spousal resource assessment would apply, request a consultation about your family's Medicaid and long-term-care options through Medicaid Asset Protection Group.