You are probably aware of the fact that Medicaid is a jointly administered federal/state government health insurance program for low income individuals and families. As a person that is interested in elder law and estate planning assistance from a legal perspective, you may wonder why Medicaid should be of interest to you at all.
The answer is that Medicaid will pay for long-term care. About 35% of senior citizens will eventually reside in nursing homes, and Medicare will not pay for the custodial care that you would receive in one of these facilities.
Even though Medicaid is intended for people with sparse resources, most people in nursing homes are enrolled in the program. It is possible to obtain eligibility if you take the right steps in advance, and we will look at five important pieces of information about Medicaid planning here.
The limit on assets for Medicaid eligibility in New York in 2019 is just $15,450. This threshold can seem like an insurmountable obstacle that stands between you and your application approval, but you can continue reading to get some good news to wash away the bad.
Everything that you own is not considered to be a countable asset for Medicaid purposes. In some instances your home is not a countable asset, but there is an equity limit of $878,000 in our state for the rest of this year. These figures are adjusted annually to account for inflation, so you can expect to see somewhat larger numbers year by year.
One car or truck that is used as a primary source of transportation would not be counted. Medicaid doesn’t care about your personal belongings and household items, and you can maintain ownership of your wedding and engagement rings and heirloom jewelry.
Term life insurance is coverage that does not have a cash value, and there is no limit on the amount of term life insurance that you can carry. When it comes to whole life, the limit is $1500, and you are allowed to have the same amount of money put aside for final expenses. Along these lines, prepaid burial plots are not counted against you.
Rights of the Healthy Spouse
In many cases, a healthy spouse will continue to live independently after their spouse is in a long-term care facility. Under these circumstances, the healthy spouse is entitled to certain property rights, including half of the shared countable assets, but there is a limit.
This is called the Community Spouse Resource Allowance, and during the current calendar year, the upper limit is $126,420. There is also a minimum that stands at $74,820 in New York.
To explain the minimum through the use of an example, let’s say that the total shared countable assets are $100,000. Half of that is $50,000, but because there is a minimum, the healthy spouse would be able to retain $74,820.
We touched upon the equity limit for home ownership. If a healthy spouse is remaining in the place of residence, there would be no equity limit at all. However, without proper advance planning, the home value may be lost upon a sale, or upon the healthy spouse’s death or inability to continue living in the home.
Almost all of the income that is brought in by an institutionalized person that is relying on Medicaid would go toward the cost of the care that is being received. However, this requirement is waived when a healthy spouse is relying on all or part of the income to maintain a reasonable standard of living.
This benefit is called the Medicaid Monthly Maintenance Needs Allowance. The maximum allowance in our state this year is $3161.
Medicaid Look-Back Period
When it comes to the assets that are countable, you could give gifts to your loved ones with Medicaid eligibility in mind. This is often done, but you have to be aware of the five-year look back period. You have to complete all gift giving at least five years before you apply to obtain immediate coverage.
An Elder Law Attorney Can Help!
Perhaps the most important thing to know about Medicaid planning is the value of legal counsel. We can gain understanding of your situation and help you devise a plan that leads to Medicaid eligibility at the right time. If you are ready to get started, you can send us a message to set up a consultation appointment or call us at (585) 374-5210.