-
Medicaid is a healthcare program that is primarily funded by the U.S. federal government; however, it is administered by the individual states and may receive supplemental funding from the states. The eligibility guidelines and benefits offered can vary somewhat from one state to state; however, most states offer different categories of Medicaid, such as Medicaid for children, pregnant women, and the aged and disabled.
-
-
Typically, the answer is “no.” Medicaid imposes a 60-month “look-back” rule that prevents an applicant from transferring assets for less than the fair market value during the 60-month period leading up to an application. Any transfers for less than market value will likely cause Medicaid to impose a waiting period, the length of which is determined by dividing the amount of your excess assets by the average monthly cost of LTC in your area. Once again, you will be forced to rely on your “excess” assets to cover your LTC expenses during the waiting period.
-
-
If your assets exceed the countable resources limit, Medicaid will deny your application and you will be placed in Medicaid “spend-down” status. In essence, you will need to “spend-down” your assets until the value of your non-exempt assets is below the program limit. In practical terms, this means you must use your own “excess” assets to pay for LTC until you reach a point at which Medicaid will approve your application.
-
-
The good news is that some assets are exempt when calculating the value of your countable resources for Medicaid eligibility. Again, each state decides what assets are exempt. Non-exempt assets in Ohio include:
- Your primary residence (up to $636,000 in equity as of 2022)
- Personal belongings
- Household items
- One vehicle
- Irrevocable burial trust
-
-
Although each state has its own eligibility requirements, all states use an income and asset test when determining eligibility. Aside from proving citizenship (or another legal status) and residency, this means you will need to demonstrate that your income and “countable resources” do not exceed the program limits – and those limits are very low. This can be a problem for those who failed to anticipate the need to qualify for Medicaid in the future.
-
-
The simple answer is that you might need to rely on Medicaid to cover long-term care (LTC) expenses. While you could need LTC at any point in your life, the odds of needing long-term care (LTC) increase rapidly as you age. You enter your retirement years with a 50 percent chance of eventually needing LTC which increases to a 75 percent chance at age 85. As of 2021, the average yearly cost of LTC in Ohio was almost $100,000. While you may rely on Medicare to cover healthcare expenses as a retiree, Medicare will not cover LTC expenses nor will most private health insurance policies unless you purchased separate LTC coverage.
-
-
Those who are unfamiliar with Medicaid and Medicare often use the names interchangeably and/or assume they are the same program. Medicaid and Medicare are two distinct programs, although they both offer healthcare benefits. Like Medicaid, Medicare is funded by the U.S. government but is also administered by the federal government. The more important difference between the two programs is that Medicaid is a “needs-based” program, meaning you must demonstrate a financial need for the benefits to qualify. Medicare, on the other hand, is an entitlement program, meaning that if you paid into the program during your working years, you are automatically entitled to benefits when you turn 65.
-
-
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.
-
-
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.
-
-
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, it is a need-based program. As a result, the limit on assets is just $2000.
-
-
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.
-
-
The sudden need to qualify for Medicaid can put your hard-earned retirement nest egg at risk if you did not plan for the possibility. The overall goal of Medicaid planning is to prevent that from happening by incorporating legal tools and strategies into your estate plan to protect your assets and ensure that you will be eligible for Medicaid benefits if you need them in the future.
-
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.
You can send us a message to request a consultation appointment, and we can be reached by phone at 513.721.1513.
