To understand why Medicaid eligibility can be important to you if you have resources and you are eligible for Medicare coverage, you have to understand some things about long-term care. This is an issue that you may not think about when you are engaged in your retirement planning efforts. Tarrytown Medicaid attorneys understand how Medicaid eligibility can affect your ability to pay for future nursing home care.
You cannot overlook the potential need for nursing home care
Many people require living assistance at some point in time. In fact, seven out of every 10 seniors will someday need help with their day-to-day needs according to a government agency. Most people qualify for Medicare when they reach the age of 65, but Medicare does not cover long-term care. Paying out-of-pocket can consume all or most of what you intended to leave behind to your loved ones because living assistance is very expensive.
Don’t underestimate the cost of nursing home care
Unfortunately, as Tarrytown Medicaid attorneys know, many people underestimate the real costs of nursing home care. Genworth Financial has been conducting an ongoing survey that provides a great deal of useful information to the elder law community. The survey is quite detailed, and it drills down to metropolitan areas within states. In the Long Island area, the median annual cost for a private room in a nursing home is over $162,000. A government survey was done a few years ago, and it found that the average length of stay was around two years and three months, but of course, some people stay longer.
What’s the Solution?
Medicaid has become the de facto source of long-term care insurance in the United States, though it was not technically intended to be used for this purpose. This is a government health insurance program that is in place to provide a safety net for people with very limited financial resources.
Medicaid Eligibility basics
Medicaid eligibility is quite relevant because this program will pay for long-term care. As it turns out, it pays for most of the nursing home care that seniors in the United States are receiving. Since it is a need-based program, there is a $2000 limit on countable assets. However, some things are not countable, like your home (up to $828,000 in equity), your vehicle, and your personal belongings.
What rights do healthy spouses have?
When a married senior citizen applies for Medicaid to pay for long-term care, the healthy spouse who is still capable of independent living can retain a certain store of resources without violating the $2000 asset limit. First, let’s look at the matter of income.
Most of the income that is received by a Medicaid recipient must go toward the cost of the long-term care that is being received under program regulations. However, this requirement can be waived if a healthy spouse is relying on all or some of the income for a basic level of support.
What is the Monthly Maintenance Needs Allowance?
The healthy spouse can be entitled to a Monthly Maintenance Needs Allowance. This would allow the healthy spouse to continue to utilize income that is due to the institutionalized spouse. There is a maximum Medicaid Monthly Maintenance Needs Allowance set by each state.
The Community Spouse Resource Allowance
In terms of Medicaid, the healthy spouse who is capable of independent living is often referred to as the community spouse. As we stated previously, the limit on countable assets for an individual applicant is $2000, but the healthy spouse is eligible to receive a Community Spouse Resource Allowance. This equates to half of the shared countable assets, but there is a limit set by each state.
Medicaid eligibility strategies
People typically divest themselves of assets as a Medicaid eligibility strategy. This is called a Medicaid spend down. It would be possible to give gifts to loved ones before you apply, but the gift giving must be completed at least five years before you submit your application. Eligibility is delayed if this five-year rule is violated. Because of the 60 months look-back, advance planning is the key to timely Medicaid eligibility.
Attend a free seminar today! If you have questions regarding Medicaid eligibility or any other Medicaid planning matters, please contact the experienced attorneys at the Law Offices of Mary A. Miller, P.C. for a consultation. You can contact us either online or by calling us at (914) 939-6565. We are here to help!