The Medicaid program is relevant to many senior citizens. While most people are going to qualify for Medicare coverage initially, Medicaid enters the picture because Medicare will not pay for long-term care. If you need help with your day-to-day needs, the care is considered to be custodial care rather than medical or convalescent care. Custodial care is not covered by Medicare.
A very significant percentage of seniors do eventually need help with their activities of daily living. According to the United States Department of Health and Human Services, 70 percent of people who are turning 65 will eventually need long-term care. Living assistance is very expensive, and most people cannot easily absorb these costs out-of-pocket.
Medicaid is a program that is available to people who can demonstrate significant financial need. As a result, Medicaid planning is typically going to involve a Medicaid spend down. The term is more or less self-explanatory: you spend down or divest yourself of assets before you apply for Medicaid coverage.
Most states have an asset limit of $2000 for a single individual, but everything that you own is not considered to be countable. You can retain ownership of one vehicle, a life insurance policy valued at up to $1500 (the rules are slightly different in North Carolina), your wedding rings and heirloom jewelry, and your personal effects. It is also possible to retain up to $1500 for funeral or cremation expenses.
In addition to the above, your home may not considered to be a countable asset, but there is an upper equity limit. We have offices in Kentucky and North Carolina. The upper home equity limit in 2014 in these two states is $543,000.
If you are married and your spouse is going to remain at home, there is no upper equity limit at all.
Even if your home does not count when Medicaid is evaluating your financial profile, the program can seek reimbursement from the assets that comprise your estate. As a result, your home could potentially be targeted after you pass away when Medicaid is seeking recovery. If you take the right steps in advance, you can make sure that you keep your home in the family.
Medicaid Planning Consultation
If you are concerned about potential long-term care costs, you should discuss Medicaid planning with a licensed elder law attorney. There is a lot to take into consideration, and the program rules are complex.
There is a five year look back period for gifts so the proper type of planning depends on whether you are planning at least five years prior to applying for Medicaid.
We would be glad to assist you if you would like to put a plan in place. You can request an appointment through the contact page on this website.