The oldest segment of the population is growing faster than any other, and when you become a member of the group that is known as the “oldest old,” you may require nursing home care. This term is used within the geriatric community to describe people that are 85 years of age and older.
On the surface, you may resolve to cross your fingers and hope for the best. If you have to reside in a nursing home toward the end of your life, so be it. This may be a pragmatic attitude on an emotional level, but there is a financial component to consider as well.
Before they understand all the facts, many people have no worries about nursing home costs, because they assume that Medicare will pick up the tab. This is understandable, because the program exists to help senior citizens for the most part.
The majority of elders eventually require long-term care, so it would make no sense to have a health care insurance program for seniors that does not cover this eventuality.
You can question the fairness, but the cold hard fact is that Medicare will not pay for the custodial care that nursing homes provide. The program will pay for convalescent care after an injury or illness when recovery is anticipated, but it does not cover custodial care.
Here in the Cincinnati area, the median cost for a single year in a private room in a nursing home in 2019 has been $117,348 according to Genworth Financial. Any amount of time in a nursing home is expensive, but an extended stay can take a significant bite out of your legacy.
The Medicaid Solution
For most people, the solution is Medicaid coverage. This jointly administered federal/state government health insurance program will pay for long-term care if you can gain eligibility. However, the “if” is a pretty big one, because the program is intended for financially needy people, and there is a low asset limit.
This limit is just $2000, but some things do not count, including your home, but there is an $585,000 equity limit in Ohio in 2019.
Other non-countable assets include one vehicle, wedding and engagement rings, heirloom jewelry, prepaid burial plots, and personal effects and household items. You can have unlimited term life insurance, $1500 worth of whole life insurance, and the same amount set aside for final expenses.
The Community Spouse
Now that we have set the stage appropriately, we can get to the point of this post. If you are married and you are applying for Medicaid to pay for nursing home care, your spouse is entitled to certain property rights. We mentioned that the home is not counted, but there is an equity limit. When your spouse is remaining in the place of residence, there is no equity limit at all.
There is a Medicaid Community Spouse Resource Allowance. This allows the healthy spouse to keep half of the shared countable assets without impacting eligibility for Medicaid coverage. That’s the good news, but the bad news is that there is a limit. In our state during the current calendar year, this limit is $126,420.
We also have a $25,284 minimum Community Spouse Resource Allowance in Ohio. To explain this by way of example, let’s say that you and your spouse have $30,000 in shared assets. Half of that is $15,000, but because of this minimum, your spouse would be able to keep $25,284.
The healthy spouse can qualify for a Monthly Maintenance Needs Allowance as well. This would allow the community spouse to receive income that is brought in by the institutionalized spouse. Under other circumstances, this income would be used to defray the long-term care costs. At the moment, the max Monthly Maintenance Needs Allowance is $3161, and the minimum is $2,057.50.
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