Key Facts About Medicaid Planning in Ohio
You will qualify for Medicare when you are 65 if you accumulate at least 40 retirement credits while you are working. Four credits are awarded each year if you cross the minimum earning threshold, which is very modest.
If you are married, even if you do not have the 40 credits, you can qualify on your spouse’s work record. Since the requirements are not very stringent, the vast majority of seniors qualify for Medicare. This will provide a health insurance underpinning, but there are out-of-pocket costs.
The deductibles, copayments, and premiums are manageable for most people, but there is one gap in the coverage that can yield devastating financial consequences. Medicare will not pay for a stay in a nursing home, and 35 percent of seniors will eventually need this type of care.
Medicaid is another government health insurance program that does pay for living assistance. Since it is a need-based program, you cannot qualify if you have more than $2000 in assets.
To be able to qualify for Medicaid to pay for long-term care, you have to act in a fully informed manner. Let’s look at some key information about the program and the pathway that leads to eligibility.
Some assets are not countable.
Though there is a $2000 asset limit, there are a number of different things that you may have in your possession that are not counted. Your home is one of them, but there is an equity limit. At the time of this writing in 2020, the equity limit is $595,000.
One vehicle is not counted, along with wedding rings, engagement rings, and heirloom jewelry. Your furniture and other household items are not counted, and personal belongings are exempt.
Prepaid burial plots are allowed, along with $1500 set aside for final expenses. You can have the same amount of whole life insurance, and unlimited term life insurance is permitted.
The healthy spouse can keep half of shared countable assets.
In many cases, a person will enter a long-term care facility that is married. Under these circumstances, the independent spouse is entitled to a Community Spouse Resource Allowance. This is equal to half of the shared assets that are considered to be countable up to a certain limit.
During the current calendar year, the maximum community spouse resource allowance in Ohio is $128,640. There is also a minimum allowance of $25,728. Because there is a minimum, the healthy spouse can keep this amount even if it is more than half of the total shared assets.
The independent spouse can continue to receive their spouse’s income.
When a single person is using Medicaid to pay for long-term care, almost all their income would be used to defray the cost of the care that is being received. This requirement is waived when a healthy spouse is relying on the income to maintain a reasonable standard of living.
The community spouse would receive a Monthly Maintenance Needs Allowance. The maximum allowance in our state this year is $3216, and the minimum is $2113.75.
You can give gifts, but there is a look back period.
People typically give gifts to their loved ones in an effort to gain Medicaid eligibility. This is a process that is often referred to as “spending down.” It is a common sense approach, but you have to act well in advance to optimize the strategy.
There is a five-year Medicaid look back period. Your eligibility is delayed if you give away assets within five years of the submission of your application.
The duration of the penalty is based on the amount that you gave away as it compares to the cost of nursing home care in Ohio. For example, if you gave away enough to pay for one year in a nursing home, your eligibility would be delayed by one year.
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