By Barry Zimmer on December 21st, 2021 in Asset Protection, Elder Law, Medicaid
We are going to look at some important updated figures that apply to Medicaid for married couples. But before we hone in on these new numbers for 2022, we will explain why Medicaid should be on your radar even if you will qualify for Medicare.
Long-Term Care
Between 30 and 40 percent of senior citizens will live in nursing homes at some point in time, and 70 percent of elders will need some type of long-term care. Slightly more than half will require a level of care that can only be provided by a professional
The bottom line is that most seniors will incur long-term care expenses. If you know that you are going to qualify for Medicare when you reach the age of 65, you may not be concerned about these costs.
After all, Medicare must cover a form of care that is needed by most seniors, right? In fact, this is not the case. Medicaid will cover long-term care expenses, and this is why it is relevant. Nursing homes and in-home caregivers are very expensive, so the coverage is invaluable.
Eligibility Parameters
There is a $2,000 limit on assets for Medicaid eligibility purposes, but some resources do not count. You can qualify if you own a motor vehicle, and wedding and engagement rings are not counted. Your personal belongings and household items are exempt as well.
A home is not a countable asset for Medicaid purposes, but there is an equity limit. In 2022, it will rise from $603,000 to $636,000.
Spousal Allowances
When a married person is applying for Medicaid to pay for long-term care, the well-being of the healthy spouse is taken into account. The healthy spouse is called the “community spouse” in Medicaid parlance, and they are entitled to a Community Spouse Resource Allowance.
This is half of the assets that are countable up to a limit. In 2021, the limit has been $130,380 in our state, and the minimum allowance is $26,076. Next year, the maximum will be $137,400 and the minimum go up to $27,480.
Income that is brought in by the Medicaid beneficiary must be used to contribute toward the expenses. This requirement is not enforced if a healthy spouse needs the income. The amount they can continue to receive is called the Monthly Maintenance Needs Allowance.
In 2022, the maximum allowance is going to be $3,435 a month, and the minimum will be $2,177.50 a month.
Non-Countable Assets
What can you do with assets that are countable when you are trying to qualify for Medicaid to preserve your legacy? Clearly, you could give direct lifetime gifts, but you have to complete the divestitures at least five years before you apply for Medicaid.
If you are relying on income that you get from the assets that you have invested, you would not be able to give the assets to your children five years before you may need long-term care. Fortunately, a Medicaid trust can be the solution under these circumstances.
You fund this irrevocable trust, and you give up access the principal when you take this step. While you are living in the community, you can continue to accept distributions of the income that is generated by the assets in the trust.
As long as you fund the trust at least five years before you apply for Medicaid, the principal would not count.
Schedule a Nursing Home Asset Protection Consultation!
There is a lot at stake if you do not take action in advance to protect your resources. When you work with our firm, we will gain an understanding of your situation and help you implement a plan that keeps your assets in the family.
You can schedule a consultation at our Cincinnati elder care planning office if you call us at 513-721-1513, and you can use our contact form to send us a message.