As the costs of long term care escalates fewer and fewer people are able to pay for this care out of their retirement savings. Some statistics say that a majority of people over age 65 will require nursing home care with an average length stay of three years. One in ten will have a stay in excess of five years. Economists say that it would take a liquid net worth in excess of one million dollars to be able to pay for this nursing home care without some type of assistance. Current studies estimate that 2/3 of all residents in nursing homes today receive Medicaid help to pay for their care.
Nursing Home Coverage for Single Individuals
For a single individual, the asset limit for Medicaid is $1,500 in countable assets. Once Medicaid begins paying for nursing home care, an individual’s income, less a $52 personal needs allowance then the costs of supplemental insurance will be paid to the nursing home.
Nursing Home Coverage for Couples
When a spouse is placing their wife or husband into nursing care, the spouse needs to be aware that special rules may provide for accelerated Medicaid qualification to cover nursing home costs. The spouse at home is guaranteed to be able to keep a minimum of $22,728 but no more than $113,640 in countable assets.
Depending upon the applicable laws when you seek Medicaid qualification, there are a number of plans and strategies which may be implemented to achieve Medicaid eligibility while preserving assets for any future need. Note that eligibility transfer penalty rules change frequently. Therefore, it is critical that you consult with a knowledgeable Elder Law attorney familiar with current Medicaid rules prior to Medicaid eligibility planning and gifting.
Won’t the state and nursing home take all my assets?
As long as you (or your spouse) are living, the state or nursing home will not take your assets. Medicaid simply will not pay for your care costs until your countable assets have been spent or sheltered. At your death, the State will have a claim against any assets still in your name.
Doesn’t my trust protect my assets?
Not necessarily. Most trusts are countable assets for Medicaid purposes. Some special types of trusts, such as irrevocable trusts and special needs trusts, may shelter your assets, but there are downsides and risks that must be carefully considered before considering one of these estate planning tools. A knowledgeable Elder Law Attorney will help you understand the downsides and risks that must be carefully considered before using any type of trust to protect your assets.
Can’t my children deal with this when I need care?
Not necessarily. As Medicaid rules change and tighten, there are fewer options available for short term planning. In addition, financial decisions you make today not contemplating long term care may have an adverse effect on a future Medicaid need.
Won’t my long term care insurance/Medicare pay for my care?
Medicare only covers long term care a rehabilitation following a hospital stay. In addition, it only pays for the first 20 days of a a stay. Depending on your Medicare Supplement plan, there may be a significant copay for days 21-100.
With long term care insurance, there are many different types of policies with vastly different coverage options. With care costs exceeding $200 per day, if you purchased a policy without an inflation rider, your policy may not cover your care expenses. In addition, as more policies cover home care and assisted living you may find that you have exhausted your policy benefits before you reach the nursing home.
Call 574.232.3538 to make an appointment with one of our elder law team to discuss your Medicaid related questions.