While it is true that most people will qualify for Medicare when they reach the age of 65, there is an enormous gap in the coverage. This program will not pay for a stay in a nursing home or assisted living facility.
Medicaid will cover the costs if you can gain eligibility, and this is why it is relevant in an elder law context.
Yes, it is a need-based program. As a result, the limit on assets is just $2000.
The $2000 limit is for countable assets, but some resources are not counted if you were to apply for Medicaid to pay for long-term care.
Your home is one of them, but there is an equity limit that is much higher than the median home value in Cincinnati. We are not sharing an exact number because it changes year-by-year as inflation is taken into account.
In addition to your home, there are some other assets that are exempt, including your vehicle, wedding and engagement rings, heirloom jewelry, your personal effects, and the items that you have around the house.
You can have unlimited term life insurance and up to $1500 worth of whole life insurance. The same amount can be set aside for final expenses, and prepaid burial plots are not counted.
Yes, there are provisions for a healthy spouse that can still live independently. This person would be referred to as the “community spouse” for Medicaid terms.
First, there is no limit on home equity, and the independent spouse would be entitled to a Community Spouse Resource Allowance. This is equal to half of the shared assets that are considered to be countable, but there is a limit.
Once again, it is adjusted annually to account for inflation, but you can use a figure of around $130,000 as a general rule of thumb. There is also a minimum allowance that is about 20% of the maximum.
The Medicaid program will absorb almost all of the income that is brought in by a person that is using the program to pay for long-term care, but there is one exception. When a healthy spouse is relying on the income, they may be entitled to a Monthly Maintenance Needs Allowance.
This would allow the community spouse to continue to receive income that is earmarked for the institutionalized spouse.
You could definitely do this, but timing is key, because there is a five-year look back period. All gift giving must be completed at least 60 months before you submit your application for Medicaid coverage.
If you violate this rule, you would not necessarily be permanently disqualified, but you would be subject to a period of ineligibility. The interim would be calculated based on the amount that you gave away as it compares to the cost of nursing home care in Ohio.
To explain through the utilization of a simple example, if you gave away enough to pay for two years of nursing home care, your eligibility would be delayed by two years.
Learn More About Medicaid Planning!
Though it can sound like a very challenging endeavor, with the proper planning, you can position your resources optimally with future Medicaid eligibility in mind. If you would like to discuss the matter with an elder law attorney from our firm, our doors are open.