In this post, we will look at some facts and figures about the Medicaid program. Before we do this, we must provide some background information so you understand why Medicaid may be relevant to you, even if you will qualify for Medicare when you are 65 years of age.
Medicare will help to pay for a wide range of different health care treatments, procedures, and services, including convalescent care after an injury or illness. However, it will not pay for custodial care.
This is the type of care that you would receive in a nursing home or assisted living community. There are also health aides that provide mobile custodial care in the homes of patients, and Medicare does not cover their fees.
If you are under the impression that there is a good chance that you will never need long-term care of any kind, we have some bad news to pass along. The vast majority of senior citizens will someday need help with their activities of daily living. Many of them will spend their final days in nursing homes.
These facilities are extremely expensive around the country. According to Genworth Financial, the median annual charge for a stay in a private room in a nursing home in our area was $117,000 in 2019.
Of course, some people require multiple years of care, and if you are married, there can be two separate rounds of nursing home costs that must be addressed.
Without question, the numbers can get quite large, and these are the figures that are in place at the time of this writing. Costs are rising year-by-year, so if you need nursing home care in a couple of decades, the rates will be much higher than they are right now.
Nursing Home Asset Protection
All the above sounds like a lot of gloom and doom, and admittedly, it is not a very pleasant prospect on a personal level or a financial level. However, when you reach an advanced age, you may face certain eventualities that are just part of life.
On the financial front, there is a widely embraced solution that can help you preserve your legacy for the benefit of your loved ones.
Medicaid will pay for a stay in a nursing home, and in fact, the majority of people in nursing homes are enrolled in the program. According to the American Association of Retired People, the figure is 65 percent.
Most individuals are aware of the fact that this program is only available to applicants with limited financial resources (there is a $2000 asset limit). This being stated, many people in nursing homes were never abjectly poor.
To qualify for Medicaid to pay for long-term care, folks often give away assets to their loved ones before they apply. Medicaid attorneys call this a “spend down,” but it is somewhat complicated to accomplish this goal.
There is a five-year look back period, so you have to complete your gift giving at least five years before you apply in order to receive immediate eligibility.
Rights of the Healthy Spouse
Now that we have set the stage appropriately, we can get to the point of this blog post. If you are married and you are applying for Medicaid while your spouse is still capable of independent living, the healthy spouse would have certain property rights.
The family home is not a countable asset, but there is an equity limit of $595,000 in Ohio in 2020. This limit is waived if there is a healthy spouse remaining in the home.
The healthy spouse is entitled to a Community Spouse Resource Allowance. This is equal to half of the shared countable assets, but there is a limit. It stands at $128,6400 this year on the high end.
There is a minimum allowance of $25,728, so a healthy spouse can keep no less than this amount, even if it is more than half of the countable assets.
Under ordinary circumstances, almost all of the income that is earned by the spouse that is in a long-term care facility would be absorbed by Medicaid to defray the costs.
However, if the community spouse relies on all or some of this income to maintain a minimum standard of living, he or she would receive a Monthly Maintenance Needs Allowance. The maximum allowance in our state in 2020 is $3216, and the minimum is $2113.75
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