Medicaid Planning: Action Is Required

Our Charlotte elder law attorney assists people who are concerned about the eventualities of aging. The major elder law issue of our day is long-term care and the costs that go along with it.

Many people assume that Medicare will pay for long-term care, and this makes sense since the program is ostensibly designed to address medical issues that seniors typically face.

A lot of us would say that it isn’t fair, but Medicare will not pay for help with your activities of daily living — your long-term care. This is considered to be custodial care rather than convalescent care. The Medicare program does not cover the custodial care you would receive in a nursing home, and it doesn’t pay for in-home care either.

Nursing Home Costs

Genworth Financial is a great source of information about the current state of long-term care costs. They conduct in-depth research on the national and state levels, and they even drill down to individual cities that are well populated

Here in Charlotte, North Carolina, one of the cities where we practice law, the median monthly cost for a private room in a nursing home is $7665. The figure is $6935 for a semi-private room. Assisted living facilities are also quite expensive. The median monthly charge for a one bedroom unit in a Charlotte assisted living facility is $3803.

When you do the math, you see that an extended stay in these facilities could potentially exhaust all the resources that you have always intended to leave to your loved ones.

Alzheimer’s Disease

Seven out of every ten seniors will need help with their activities of daily living eventually, and many will ultimately reside in nursing homes. While there are other underlying causes, Alzheimer’s disease is a leading culprit. It strikes 10% of all seniors and 40% of seniors over 85.

The Medicaid Solution

Now that we have provided the necessary background information, we can move on to the solution to the nursing home payment problem. Though Medicare will not pick up the tab for custodial care, Medicaid will absorb the costs. Of course, since it is intended for people with sparse resources, you can’t qualify if you have significant assets in your name.

When it comes to income, the state of North Carolina will require that most of the income of the person in need of care be used to pay monthly care expenses. (Remember, these rules and what you are allowed to do are different from state to state.) 

But we should point out that there is a Medicaid Monthly Maintenance Needs Allowance. This enables your spouse to receive income that you are entitled to if he or she is relying on it to supplement his or her own income to maintain a basic standard of living. The maximum allowance in 2019 is $3160.50, and the minimum $2057.50.

You cannot qualify for Medicaid if you have assets that exceed $2000 in value, but not everything you own is countable for Medicaid eligibility purposes. If you are a homeowner, the home is not counted, and there is no equity limit if your spouse will be residing in the house in after you enter a nursing home.

If a spouse is not going to reside in the home, there is an equity limit that stands at $585,000 at the time of this writing. In addition, though the home is not a countable asset, Medicaid can seek reimbursement through the sale of your property after you pass away. That being stated, an elder law attorney may be able to implement a strategy to protect your home.

You can have up to a face value of $10,000 of life insurance in North Carolina.  Prepaid burial plots are not counted, and you can retain $1500 for final expenses if you have not prepaid for a funeral. One vehicle is exempt during your lifetime, and your household belongings, personal effects, wedding ring, and engagement ring are not countable assets.

Spending Down

Our Charlotte Medicaid planning lawyer can help you qualify for Medicaid to pay for long-term care without draining all of your assets. This takes advance careful planning because you may be penalized if you give away assets within five years of submitting your application.

Attend a Free Seminar!

We have provided some food for thought in this blog post. If you would like to learn more, we invite you to attend one of our free seminars. You can click this link to see the schedule, and we urge you to register as soon as possible, because seating is limited.