Medicaid is relevant even if you will qualify for Medicare as a senior citizen for one very important reason: it will cover long-term care.
The Medicare program will pay for convalescent care after an injury or illness when recovery is anticipated. However, it does not pay for the long-term custodial care that in-home caregivers and nursing homes provide.
Nursing Home Costs
The average annual charge for a private room in a Rochester area nursing home is $181,770 in 2021, or $14,940 per month. Seventy per cent of those turning 65 years old today will need long term care. According to the United States Department of Health and Human Services, 13 percent of seniors that need paid care receive the assistance for five years or more.
Some people can receive the care that they need in their own homes from professional health aides. The cost of 24/7 home care is approximately the same as the cost for nursing home care.
Medicaid and Home Ownership
Now that we have provided a brief overview, we can get to the point of this post. Since Medicaid is a need-based program, you cannot qualify if you have significant assets in your name.
The limit on countable assets is just $2000 in almost every other state, but in New York, it is $15,900 in 2021. This is a slight increase over the $15,750 figure that was in place last year.
Your household goods and personal belongings are not counted, and you can maintain possession of a motor vehicle. Wedding and engagement rings are not countable assets, along with heirloom jewelry.
An applicant can have unlimited term life insurance and up to $1500 worth of whole life insurance. Prepaid burial plots are permitted, and as much is $1500 can be set aside for final expenses.
Your home in some instances will not be counted, but that is not always the case. In addition, there is an equity limit that stands at $906,000 in New York in 2021.
Medicaid Look-Back and Estate Recovery
Even if your home is not counted in determining your Medicaid eligibility, your home may not be protected because of the Medicaid estate recovery process. The program can put a lien on a home under these circumstances after the death of the benefit recipient.
To prevent this from happening, you could convey your home into an trust. However, the timing of the conveyance and the type of trust you use will depend on your particular circumstances, so you should work with an expert Medicaid planning attorney to avoid a potentially disastrous result.
Under some circumstances, Medicaid would not be able to place a lien on the home even if you are still the owner. If your spouse or dependent child is still in the home, it would be safe, and there would be no lien if a sibling with an ownership interest is still residing in the home.
Caregiver Child Exemption
There is an exception to the look-back rule for caregiver children. You can give the home to an adult child that has been caring for you in the home for at least two years before you apply for Medicaid. The look-back would not not apply, and Medicaid would not be able to place a lien on the property.
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