Medicaid is important to many senior citizens, because Medicare will not pay for custodial care. This is the type of care that you would receive in a nursing home or assisted living community.
These facilities are cost prohibitive for many Americans. Our firm practices in Kentucky and North Carolina. The average annual cost for a private room in a nursing home in these states exceeds $80,000. According to a National Nursing Home Survey, the average length of stay is 835 days. Ten percent of people in nursing homes remain in the facilities for at least five years.
Medicaid is a government program that will pay for long-term custodial care. Because it is a need-based program, to qualify you must have limited financial resources in your name. People often “spend down” prior to applying for Medicaid so that they can meet the eligibility requirements.
If you are married, a question is naturally going to come to mind: what about the healthy spouse who is not entering a nursing home? What can he or she keep?
There are rules in place governing the amount of assets that can be retained by the healthy or “community” spouse. The Medicaid program does not count your home when they are evaluating your eligibility, but there is an upper equity limit that stands at $543,000 in 2014. Each state has the ability to raise this figure to as much as $814,000.
These limits do not apply if a healthy spouse is going to remain in the home. There are no upper equity limits under these circumstances.
The community spouse may keep half of the shared countable assets up to $117,240 in 2014. This is the maximum that a state may allow. The minimum is $23,448.
There is also a monthly maintenance needs allowance. The institutionalized spouse must contribute some of his or her income to the long-term care costs that are being incurred. However, the community spouse may rely on income from the institutionalized spouse.
The healthy spouse may continue to receive a portion of the institutionalized spouse’s income if financial need exists. The maximum monthly maintenance needs allowance that a state can mandate is $2931 in 2014. The minimum allowable is $1,938.75 in every state except Hawaii and Alaska. The minimum monthly maintenance needs allowance is higher in these two states.
Medicaid Planning Special Report
In this post we have provided the answer to a single frequently asked question. If you would like to learn about Medicaid planning in-depth, we have a resource that is available to you.
Our firm has compiled a number of free special reports that cover various different estate planning and elder law topics. One of these reports takes an in-depth look at Medicaid planning.
You can obtain access to your copy of the report through this link: Free Medicaid Planning Report.