Medicaid should be on your radar even if you will qualify for Medicare as a senior because Medicaid will pay for long-term care. That’s right, Medicare does not cover the custodial care that nursing homes provide.
Just over half of seniors will need some type of paid care, and 35 percent of elders will reside in nursing homes eventually.
You certainly don’t want to pay these costs out of your pockets unless they are as deep as the Grand Canyon. The median annual charge for a private room in a nursing home in Rochester was $161,695 last year according to Genworth Financial.
Now that you understand the fact that the stakes are high, we will share four key facts about Medicaid planning.
Some Assets Do Not Count
Since Medicaid is a need-based program, there is a $15,900 asset limit in New York in 2021. This is a low number, but the limit is just $2000 in most states, so we get a bit of a break.
This is the limit for countable assets, but there are some resources that do not count for Medicaid eligibility purposes. Your home is not a countable asset in some circumstances, but that is not a given.
One motor vehicle that is used as a primary source of transportation is not considered to be a countable asset. Your furniture, appliances, and other household items are not counted, and Medicaid is not concerned about your personal effects.
Prepaid burial plots are exempt along with $1500 set aside for final expenses. Unlimited term life insurance is permitted along with $1500 of whole life insurance.
Medicaid Can Place a Lien on Your Home
You may breathe a sigh of relief when you see that you can qualify for Medicaid as a homeowner, but it is somewhat of a mirage. If you are in personal possession of your home when you pass away as a Medicaid beneficiary, the program can place a lien on the property.
However, there is a caregiver child exemption. If you have received care in the home from one of your children for at least two years, you can give the property to the child, and it would be protected during the Medicaid recovery phase.
There Are Healthy Spouse Provisions
When a healthy spouse can live independently while their spouse is applying for Medicaid to pay for long-term care, the independent spouse is entitled to a Community Spouse Resource Allowance. This is equal to half of the countable assets up to a certain limit.
In 2021, the limit is $130,380 in the state of New York. There is also a minimum Community Spouse Resource Allowance of $74,820, so a healthy spouse can keep this much even if it is more than half of the countable assets.
Income that is brought in by the spouse that is in a nursing home must be contributed toward the cost of the care that is being received with the exception of a $50 a month personal needs allowance. However, this requirement is waived when a healthy spouse relies on the income.
They can receive a Monthly Maintenance Needs Allowance, and the allowance in the Empire State in 2021 is $3259.50.
There Is a Five-Year Look Back Period
If you apply for Medicaid, and if you have given away assets within the past five years, your eligibility for Medicaid will be delayed for a period of time based on the combined value of all of the gifts. In 2021 in the Rochester, New York area, your eligibility will be delayed by one month for every $13,020 you gave away. However, there are some exceptions to this rule, which an experienced elder law attorney can explain. Additionally, there are planning strategies to avoid or minimize the impact of the five-year look back period.
We Are Here to Help!
Our doors are open if you are ready to work with a Rochester, New York elder law attorney to develop a nursing home asset protection plan.
You can schedule a consultation appointment right now if you call us at (585) 374-5210, and you can fill out our contact form if you would rather send us a message.