As elder law attorneys, we place a significant focus on the process of Medicaid planning. The reason why this jointly administered federal/state government health insurance program is relevant may come as a surprise to you.
If you work and pay taxes for at least 10 years, you will qualify for Medicare when you reach the age of 65 under currently existing laws. Even if you have not met this requirement, if you are married and your spouse has done so, you would become eligible based on their work record.
For the most part, Medicare exists to address the health care needs of senior citizens. Because of this, you would assume that it would cover living assistance since many elders require custodial care. Many would say that it does not make sense, but Medicare will not pay for a stay in a nursing home or long-term care facility.
Medicaid will help with these costs, and this is why it should be on your radar when you are addressing the expenses that you may face as a senior citizen. You certainly do not want to pay out-of-pocket if you have an alternative, because long-term custodial care is extremely expensive.
Eligibility Parameters Updated
Medicaid is a need-based program, so there is an asset limit of $2000. Before you turn the page thinking that you could never qualify, you should know that some things do not count.
Engagement rings, wedding rings, and heirloom jewelry are not counted, along with personal effects and household items. One vehicle is exempt, and you can set aside a small amount of whole life insurance or other funds for final expenses. Prepaid burial plots are not counted, and unlimited term life insurance is allowed.
The most valuable property that you may possess that is not a countable asset is your home, but there is an equity limit. This figure is updated every year to account for inflation, and in 2020, the limit is $595,000 in Kentucky and North Carolina.
When it comes to shared countable assets, if you are married and you are applying for Medicaid, your spouse is allowed to keep half of these resources. However, once again, there is a limit, and it has gone up this year. This is formally called the Community Spouse Resource Allowance, and the maximum is now $128,640.
Making other property non-countable or exempt from Medicaid spenddown takes some planning.
Under ordinary circumstances, almost all of an institutionalized spouse’s income would be contributed toward the cost of the care. This requirement is eased if the healthy spouse is relying on all or some of the income to maintain a reasonable standard of living. The community spouse would be entitled to a Monthly Maintenance Needs Allowance, and the maximum in 2020 is $3216.
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Written information is extremely useful, and there is certainly a lot of it to explore on this website. This blog has literally hundreds of different posts that cover every elder law and estate planning topic imaginable, and there are other free resources, including our estate planning worksheet.
Once you are fully informed, you will understand why it is extremely important to take the final step. Every case is different, and there is no one-size-fits-all, cookie-cutter estate plan. Your plan should be custom crafted to suit your needs, and we are well-positioned to provide the appropriate assistance.
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