When you are planning ahead for your senior years, you probably expect to qualify for Medicare coverage when you reach the age of 65. Eligibility is earned through the accumulation of retirement credits, and anyone that has worked for at least 10 years would accumulate the necessary 40 credits.
This government health insurance program will provide a sound foundation, but there are out-of-pocket expenses that you should budget for in advance. These would include co-payments, monthly premiums, and deductibles. To see the details, you can visit the government maintained Medicare costs at a glance page.
If you are going to qualify for Medicare, it would be logical to assume that Medicaid is not relevant to you. Plus, as a person with some resources, you would not qualify anyway.
All of this is true on the surface, but there is an unpleasant reality that is lurking underneath. Medicare does not pay for long-term care, and seven out of every 10 seniors will someday need some form of living assistance. About 35 percent of elders will eventually reside in nursing homes.
These facilities are extremely expensive, typically $177,000 per year or more in the Greater Rochester area, so nursing home costs can potentially put a significant dent in your legacy. Depending on the extent of your resources and the duration of your stay, you could actually pass away with nothing at all left to leave behind to your loved ones.
Medicaid does pay for the custodial care that nursing homes provide. This is why you should gain an understanding of the program rules when you are looking ahead toward the future.
2020 Medicaid Parameters
The Medicaid asset limit is $15,750 in New York, but this is a general statement that does not tell the entire tale. There are a number of things that do not count when Medicaid is tallying up your assets to determine your eligibility status.
Your home is the most valuable piece of property that is not counted, but there is an equity limit, and it changes every year when inflation adjustments are applied. In 2020, the limit is $893,000 in New York. However, without proper planning your home would eventually be sold and the proceeds used to reimburse the Medicaid agency.
In addition to the home, one vehicle is not counted, along with your personal belongings and the items that you have around your house. You can have as much is $1500 set aside for your final expenses, and prepaid burial plots are exempt. An applicant can be approved with up to $1500 of whole life insurance, and unlimited term life insurance is permissible.
In many cases, someone will enter a long-term care facility with a healthy spouse that can continue to live independently. Under these circumstances, there is no home equity limit at all, and there are some other provisions made for the healthy spouse.
One of them is the Medicaid Community Spouse Resource Allowance. This is essentially half of the couple’s shared assets that are considered to be countable. In New York in 2020, the maximum allowance is $128,640, and the minimum is $74,820.
A healthy spouse is potentially allowed to continue to use income that is received by the spouse that is using Medicaid to pay for long-term care. This is called the Medicaid Monthly Maintenance Needs Allowance, and the allowance during the current calendar year is $3216.
Schedule a Consultation Right Now!
We would be more than glad to discuss nursing home asset protection strategies with you, and this can be part of a holistic estate plan. When you take the right steps in advance, you can get the care that you need if it becomes necessary as you preserve your legacy for the benefit of your loved ones.
To set up an appointment, you can give us a call at 585-374-5210. We also have a contact form on this website that you can use to send us a message.