When you look into the subject, you may be unpleasantly surprised to find out that Medicare will not pay for a stay in a long-term care facility. Many people are not overly concerned because they think that it is unlikely they will ever need to move from their homes to receive assistance.
But a government agency tells us that seven out of 10 senior citizens will need some form of living assistance eventually. Granted, many individuals in this position will be able to get the help that they need from family members neighbors, friends, etc. while they remain at home.
As the years pass, though, elders will often need a level of care that can only be received in a nursing home. About 35% of elders will spend time in these facilities toward the end of their lives, and the average length of stay is right around 12 months.
The prospect of paying out-of-pocket is not a very appealing one, because nursing home costs are exorbitant and they are on the rise year by year. In Kentucky and North Carolina where we practice law, you can expect to pay anywhere from $70,000 for a year up to $100,000 or more depending on the area and the facility in question.
Nursing Home Asset Protection
Medicaid is another health insurance program that is jointly administered by the federal government along with each respective state government. It will pay for nursing home care, but you are probably aware of the fact that eligibility is based on financial need. There is an asset limit of just $2000, but some things that you own do not count.
We will get into the complete details with regard to all of the property that does and does not count in a different post, but we will stay focused on one aspect here to stay on topic.
If you own your own home, your home is not considered to be a countable asset when you are applying for Medicaid, but there is a $585,000 equity limit in the two states that we serve. However, if a healthy spouse is remaining in the home, there is no equity limit at all.
You cannot find out that you need nursing home care today, just give your house to someone in the family tomorrow, and qualify for Medicaid the next week. There is a five-year look back period so if you give away assets within five years of the day that you submit your application, it will usually be denied.
A penalty period would be imposed that is based on the value of the property that you gave away. For example, if it was enough to pay for two years of nursing home care, your eligibility would be delayed by 24 months.
Medicaid Estate Recovery
Now that you have the necessary background information, we can move on to the subject at hand. Yes, you can qualify if you have a home that is still in your possession, but you have to be concerned about Medicaid estate recovery.
Under the laws governing the program, if they were paying the nursing home bills, Medicaid is required to seek reimbursement from your estate after your passing. Since you can’t qualify if you have significant assets other than your home, this would typically center around your residential property.
If there is a healthy spouse still living in the home, there would be no recovery efforts (at least during the spouse’s lifetime). Plus, if you give the home to an adult child that has acted as your caregiver in the home for at least two years, the look back period may not apply. That being said, you must be able to properly prove that the decedent would have required nursing home care if you were not providing this assistance and there are certain pitfalls to be aware of.
Schedule a Consultation Today!
It is possible to take the right steps at the right times to gain Medicaid eligibility while protecting assets in the process. If you would like to explore Medicaid planning strategies with a licensed attorney, our doors are open. You can give us a call at 606-324-5516 to schedule an appointment in Ashland, Kentucky (or 859-372-6655 for Florence, Kentucky), and in North Carolina, our number is 704-944-3245 (Charlotte, NC and Huntersville, NC).
There is also a contact form on this website that you can use if you would rather send us a message through the website to schedule an appointment.
- What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
- How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
- Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022