The biggest elder law issue at the present time is the matter of long-term care and the costs that go along with it. Medicare does not pay for living assistance, and the vast majority of seniors will need some form of long-term care. In fact, more than one third of seniors will eventually reside in nursing homes.
Medicaid is another government health insurance program that does pay for living assistance. Most people in nursing homes are enrolled in the Medicaid program, and a high percentage of them were never poor before entering the nursing home. In this post, we will share five key facts that you should understand about Medicaid coverage.
Some Assets Do Not Count
Since Medicaid is intended for people with sparse resources, there is an asset limit of just $2000. That’s the bad news, but the good news is that some things that you probably own do not count.
Your home is not a countable asset, but there is an equity limit. We have offices in North Carolina and Kentucky, and in both of these states, the equity limit in 2020 is $595,000 (except for married couples).
You can keep one vehicle, and wedding rings, engagement rings, and heirloom jewelry are exempt. An applicant can have a small amount of whole life insurance (the amount depends on the state) and may be able to keep $1,500 for final expenses.
Personal belongings and the items that you have around the house are not counted, and prepaid burial plots are exempt.
The Healthy Spouse Has Certain Property Rights
In many cases, a married person will apply for Medicaid while the other spouse is still capable of independent living. Under these circumstances, the healthy spouse is called the “community spouse” in Medicaid parlance.
There is a Medicaid Community Spouse Resource Allowance that gives the healthy spouse the ability to keep half of the shared assets that are countable. However, there is a limit, and the maximum allowance stands at $128,640 in both Kentucky and North Carolina. The minimum amount that a healthy spouse can keep is $25,728.
When a single person qualifies for Medicaid to pay for long-term care, almost all the income would go to defray the cost of the care being received. This requirement is waived if a healthy spouse is relying on all or some of the income to maintain a reasonable standard of living.
A spouse that is in this position would be able to receive a Monthly Maintenance Needs Allowance. In 2020, the maximum allowance for North Carolina and Kentucky is $3,216. There is also a minimum allowance of $2113.75.
It should also be noted that there is no equity limit at all when a healthy spouse is remaining in the home that was shared by the couple.
Five-Year Look Back Period
When it comes to assets that are countable, you could give gifts to your loved ones to get them out of your name. But you have to act in advance because the gift giving usually must be completed at least five years before you apply for Medicaid coverage.
You could still become eligible, but you would have to wait out a penalty period. For example, if you give away enough to pay for one year of care within the five-year window, your eligibility for Medicaid would be delayed by one year.
Medicaid Estate Recovery
Though you can qualify for Medicaid while you are in possession of your home, you have to be concerned about Medicaid estate recovery efforts. The program is required to seek reimbursement from assets that comprise your estate after you are gone. If you do not engage in planning and you still own your home, it could be attached.
Legal Assistance Is Recommended
The last thing you should understand about Medicaid is that an attorney from our firm can help you create a plan that leads to future eligibility. If you are ready to set the wheels in motion, you can reach our Charlotte, North Carolina office at 704-944-3245.
The number for our location in Kentucky is 606-324-5516 (Ashland, KY) or 859-372-6655 (Florence, KY), and there is a contact form on this website you can fill out if you would like to send us a message.