If you pay into the program for at least 10 years while you are working, you will qualify for Medicare when you are 65. It should be noted that you would be eligible at that age even if you did not work, as long as you are married and your spouse has met the requirement.
Contrary to popular belief, Medicare does not pay for everything in full. There are deductibles, coinsurance, and monthly premiums. In fact, you have to pay $135.50 a month for the portion of the program the pays for visits to doctors, and it will only cover 80% of the costs.
You should certainly budget for these out-of-pocket expenses in advance when you are looking ahead toward your retirement years. Plus, there is an enormous void in the coverage that is the most important elder law issue that we address with our clients.
About 35% of senior citizens will reside in nursing homes toward the end of their lives, and the average length of stay is right around one year. Medicare does not pay for the custodial care that nursing homes provide.
This is pretty rough when you consider the fact that the median charge for a private room in a Cincinnati area nursing home was $98,550 in 2018. This figure comes courtesy of a Genworth Financial survey, and they predict a 4% per year increase in the costs over the next five years.
Medicaid is a different government health insurance program that will pay for a stay in a nursing home if you can gain eligibility. However, there are strict asset and income limits, because the program is intended for people with very limited financial resources.
At this point, you can probably see why certain figures are extremely relevant when you are applying for Medicaid to pay for long-term care, so let’s look at the rundown.
This is the limit on countable assets for Medicaid eligibility purposes. However, some things that you own do not count, including your personal belongings, your household goods, and one motor vehicle.
You can maintain ownership of your wedding and engagement rings and heirloom jewelry along with up to $1500 set aside for final expenses. The same amount of whole life insurance is permissible, and there is no limit on the amount of term life insurance that you can carry.
The most valuable non-countable asset is your home. There is however a $585,000 limit on equity in 2019. You may see a somewhat higher figure in subsequent years after inflation adjustments have been applied.
Let’s say that you need to enter a nursing home and your spouse can remain at home. Under these circumstances, your partner would be able to keep half of the shared countable assets up to a particular limit. This is called the Community Spouse Resource Allowance.
At the time of this writing, it is $126,420 on the high-end. There is also a minimum allowance of $25,284. This is the minimum that a healthy spouse could retain, even if it is more than half of the total countable assets.
When a healthy spouse is depending on income that is brought in by the spouse that will be entering a nursing home, the community spouse could receive a Monthly Maintenance Needs Allowance. This allows the healthy spouse to keep receiving the income that would otherwise go to defray the cost of the care that is being received by the institutionalized spouse.
The maximum allowance in 2019 is $3161, and the minimum is $2058.
After you have used up all of your allowances, what do you do with the rest? The answer is that you can give gifts to loved ones other than your spouse before you apply. However, the gift giving must be completed at least five years before you submit your application.
If you violate this rule, you will be deemed ineligible for a certain period of time that is tied to the amount of the divestitures. For example, if you gave away enough to pay for 18 months of nursing home care, your eligibility would be delayed by 18 months.
This is the number that you can call to schedule a nursing home asset protection consultation with an elder law attorney from our firm. There is also a contact form on this website that you can use to reach out electronically.