The most significant elder law issue that should be on your radar is the matter of long-term care and the costs that go along with it. Once you attain senior citizen status, it becomes likely that you will need help with your activities of daily living at some point in time. More than 30% of elders will someday spend time in nursing homes.
These facilities are extremely expensive, so a stay in a nursing home can potentially consume a significant portion of the legacy that you have always intended to pass along to your loved ones. And of course, if you are married, your family may be confronted with two different rounds of nursing home expenses.
At this point, you may be thinking that you do not have to worry about these costs because you will qualify for Medicare when you reach the age of 65. This program will pay for convalescent care after an injury or illness when recovery is expected, but it does not pay for the custodial care that is provided by nursing homes.
What’s the Solution?
You do not necessarily have to go broke paying for nursing home care if you take the right steps in advance. Medicaid is another government run health insurance program that will pay for nursing home care. However, you are probably aware of the fact that this is a need-based program that is only available to people with limited resources.
Medicaid Eligibility Parameters
Each year, some of the eligibility parameters are adjusted to account for inflation. For the most part, they apply to assets that can be retained by the healthy spouse when a married person is using Medicaid to pay for long-term care.
When it comes to countable assets, the limit has traditionally been $2000, and this has not changed. That is a paltry sum of money in the big picture, but many assets are considered to be exempt for Medicaid eligibility purposes.
Wedding rings and engagement rings are not counted, along with heirloom jewelry. Household items and personal belongings are exempt, and an applicant can retain ownership of one motor vehicle. Prepaid burial plots are not countable assets, and unlimited term life insurance is permissible.
As much as $1500 in whole life insurance is allowed, and this amount can also be retained to address a portion of final expenses.
If you own a home, it is not counted, but there is an equity limit. In Ohio, it has been increased to $595,000 for 2020. It should be noted that there is no equity limit if a healthy spouse is remaining in the home.
The Medicaid program is required to seek reimbursement from the estates of deceased recipients. This is called “estate recovery,” and it could be a factor if you qualify for Medicaid while you are still in direct possession of a home. There are steps that you can take to protect the property, and we will cover them in a future blog post.
The healthy spouse is entitled to a Community Spouse Resource Allowance. This is half of the shared countable assets, but it is not unlimited. There is a ceiling, and during the current counter year, it stands at $128,640. In our state, there is a minimum allowance of $25,728. The healthy spouse can keep this amount even if it is more than half of the total shared assets.
A healthy spouse may also be entitled to a Medicaid Monthly Maintenance Needs Allowance.
This would allow the community spouse to continue to receive all or some the institutionalized spouse’s income if it is necessary to maintain a reasonable standard of living. Under other circumstances, almost all of it would go toward the cost of the care that is being received.
The maximum Medicaid Monthly Maintenance Needs Allowance for this year is $3216, and the minimum is $2113.75.
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We are here to help if you would like to discuss nursing home asset protection strategies with a licensed elder law attorney. You can send us a message to request a consultation appointment, and we can be reached by phone at 513-721-1513.