After all, Medicare is a source of health insurance for senior citizens that can qualify, so why would you ever need Medicaid? And of course, Medicaid is only available to people that are financially needy, so you wouldn’t be able to qualify even if you wanted the coverage for some reason.
This is a logical point of view that makes a lot of sense on the surface. However, Medicaid is relevant because there is a huge gap in the Medicare coverage that directly impacts elders.
Some would question the fairness of this omission, but the cold hard truth is that Medicare will not pay for a stay in a long-term care facility.
Government agencies that conduct ongoing analyses and advocacy groups have found that almost three-fourths of all senior citizens will need living assistance at some point in time. About 35% of them will eventually reside in nursing homes, and the average length of stay is 12 months.
It is not easy for most people to pay for nursing home care out-of-pocket comfortably. In the Cincinnati area where we practice law, the median annual charge for a private room was $98,550 in 2018. Costs are expected to go up by 4% each year for the next five years.
As we have noted, the average length of stay is one year, and you should consider the impact of multiple rounds of nursing home expenses if you are married.
Now that you know why you may need Medicaid even if you have Medicare, we can move on to the nuts and bolts. While it is true that Medicaid is a need-based program with an asset limit of just $2000, everything that you own is not counted.
Your home is not a countable asset as long as the equity does not exceed $585,000. One vehicle is allowed, along with wedding and engagement rings and heirloom jewelry. Medicaid would not count your personal effects and household goods, and you can have $1500 worth of whole life insurance and the same amount set aside save for burial or cremation expenses.
When eligibility is being determined, if there is a the healthy spouse that will continue to live independently, the healthy spouse can maintain ownership of half of the jointly held assets.
This is called the Community Spouse Resource Allowance, and but it is not unlimited. In our state at the time of this writing, the maximum allowance is $126,420. The minimum is $25,284, so a healthy spouse could keep this much, even if it is more than half of the shared assets.
Income that is brought in by the institutionalized spouse would be absorbed by Medicaid if the person was single, but there is a provision if a healthy spouse relies on this income. They could receive a Monthly Maintenance Needs Allowance of up to $3161 a month, with a minimum of $2057.50.
Medicaid Estate Recovery
Medicaid is required to seek reimbursement from the estates of deceased individuals that were enrolled in the program. As we stated, you can maintain ownership of your home and still qualify for Medicaid. If it is part of your personal estate when you die, Medicaid would be able to go after its value during recovery efforts.
However, there are a couple of exceptions to this rule. If you have a surviving spouse still living in the home, Medicaid cannot reach the property. Another exemption would apply to a deceased former recipient that has a surviving child under the age of 21 that is blind or disabled permanently.
Attend a Free Seminar!
There are some fantastic opportunities coming up in the near future if you would like to gain a solid understanding of all the important estate planning and elder law matters. Our firm is offering a series of seminars over the upcoming weeks. They are spread out over a few different cities in the metropolitan area, so one of them will probably be held in your community.
These sessions are being offered absolutely free of charge, but we ask attendees to register in advance. To get all the details, visit our seminar page, and click on the date that interests you to register.