To understand why Medicaid should be on your radar if you will qualify for Medicare at the age of 65, you have to absorb some information about long-term care. Most senior citizens will eventually need help with their day-to-day activities, and 35% of senior citizens will spend time in nursing homes according to the United States Department of Health and Human Services.
These facilities are quite expensive, and you are talking about some huge bills that may be coming along after you have been retired for 20 years or so. In the state of Ohio where we practice law, the average annual cost for a room in a nursing home is about $80,000, and the expenses have been trending upward year by year.
Though there are some people that qualify for Medicare that are not senior citizens, for the most part, it is designed to provide health insurance for people that are 65 years of age and older. Since the majority of seniors will require living assistance, you would assume that it would pay for a stay in a nursing home.
Unfortunately, Medicare does not cover the custodial care that nursing homes provide. Medicaid does pay for long-term care if you can gain eligibility, and this is why it is important for many Medicare-eligible senior citizens.
Asset Limits and the Rights of the Healthy Spouse
Since Medicaid is a need-based program for people with limited financial resources, there is an asset limit of just $2000. That is certainly not a lot of money when you are talking about everything that you have been able to acquire throughout your life.
In spite of this, most people in nursing homes are enrolled in the Medicaid program. One reason why this is possible is because some assets that you may have in your possession are not counted when Medicaid is determining your eligibility status.
Plus, if you are married and your spouse can still live independently, the healthy spouse would have certain property rights. In Medicaid parlance, the healthy spouse is referred to as the “community spouse.”
Family Home
Your home is not looked upon as a countable asset for Medicaid eligibility purposes, but there is an equity limit. At the time of this writing in 2019, it is $585,000 here in Ohio. When a healthy spouse is remaining in the home, there is no equity limit at all.
Community Spouse Resource Allowance
The healthy spouse is allowed to retain ownership of one half of the shared community assets that are countable, but there is a limit of $126,420. On the other end of the spectrum, even if it is more than half, the healthy spouse can keep no less than $25,284.
Medicaid Monthly Maintenance Needs Allowance
When a single person is applying for Medicaid to pay for long-term care, almost all of their income would have to go toward the cost of the care that is being received. This requirement is waived when a healthy spouse is relying on the money to maintain a reasonable standard of living.
This is formally called the Medicaid Monthly Maintenance Needs Allowance. In our state during the current calendar year, the maximum allowance is $3161 per month, and the minimum allowance $2057.50.
Attend a Free Seminar!
We have covered a very important elder law matter in this brief blog post, and we hope that is has gotten your attention. If you are ready to learn more about nursing home asset protection and other important topics, we have some fantastic opportunities coming up in the near future.
Our attorneys are committed to education, so they go the extra mile to hold estate planning and elder law seminars on an ongoing basis. There are a number of dates posted on our website right now, so you should be able to find the session that fits perfectly into your schedule.
Though these seminars are offered on a complimentary basis, we do ask that you register in advance so that we can reserve your seat. You can do that right now if you visit our seminar schedule page and follow the simple instructions.
