The Medicaid program can play a key role during the final years of your life if you want to preserve your legacy for the benefit of your loved ones. This program will pay for long-term care, and Medicare does not cover the custodial care that nursing facilities provide.
In this post, we will provide you with five things you need to know about Medicaid planning so you can go forward with a general understanding of the process.
Countable vs. Non-Countable Assets
Medicaid is a need-based program, so you can’t qualify if you have more than $2000 in your own name. However, there are some assets that do not count, and this is the list:
- Motor vehicle
- Household items
- Personal effects
- Wedding and engagement rings
- Heirloom jewelry
- Prepaid burial plots
- Term life insurance
- $1500 of whole life insurance
- $1500 saved for final expenses
When it comes to the home, there is an asset limit of $603,000 in 2021.
Medicaid Estate Recovery
The idea that you can qualify for Medicaid as a homeowner is probably comforting, but it is not as simple as it sounds. There is a Medicaid estate recovery mandate, so the program is required to seek reimbursement from your estate if you used Medicaid to pay for long-term care.
As a result, if your home is in your name when you pass away, Medicaid could place a lien on the property. However, there is an exception if an adult child has been providing care for you in the home for at least two years.
Under those circumstances, you can use the Medicaid caregiver child exemption to give the home to the child, and it would be protected during the estate recovery phase.
Healthy Spouse Allowances
If you require long-term care as a married person while your spouse can still live independently, the healthy spouse is entitled to a couple of allowances.
One of them is the Community Spouse Resource Allowance that gives the healthy spouse the ability to keep half of the shared countable assets up to a certain limit. It stands at $130,380 in 2021, and there is a $26,076 minimum allowance.
With the exception of a $50 monthly personal needs allowance, the income that is brought in by the Medicaid beneficiary must go toward the cost of the care that is being received. This requirement is waived if a healthy spouse needs the income.
They can receive a Monthly Maintenance Needs Allowance that maxes out at $3259.50 a month, and the minimum allowance in Ohio is $2155 in 2021.
Five-Year Look Back Period
You can give gifts or fund an irrevocable Medicaid trust to get assets out of your name to gain eligibility, but you have to act in advance. There is a five-year look back period, so you must complete all divestitures at least five years before you apply for Medicaid coverage.
Your eligibility is delayed if you violate this provision. For example, let’s say that the state determines that the average cost for a year in a nursing home is $100,000. If you give away $100,000 within this five-year window, your eligibility would be delayed by a year.
We Are Here to Help!
The last thing you need to know about Medicaid is the fact that we can help you navigate these tricky waters. When you take the right steps at the right times, you can enjoy your golden years in comfort with the knowledge that your legacy will be preserved.
The exact approach will depend on the circumstances because there is no one-size-fits-all plan that is right for everyone. Personalized attention is the key to a properly constructed plan, and this is what you will receive when you choose our firm.
You schedule a consultation appointment at our Cincinnati elder law office if you give us a call at 513-721-1513. There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you will receive a prompt response.