In this blog post, we will be sharing some very specific information about the Medicaid program. However, before we get into it, we should explain why Medicaid is important for many senior citizens that will be the enrolled in the Medicare program.
Medicare will pay for convalescent care after an injury or illness when the patient is expected to recover fully. However, it will not pay for custodial care. This is the type of care that you would receive in a nursing home, or in your own home with the assistance of a skilled nursing professional.
This is a very big deal for two different reasons. First, you should be fully cognizant of the fact that that the majority of senior citizens will need living assistance eventually. Many of them will reside in nursing homes toward the end of their lives. Secondly, nursing home care is extremely expensive. In the Bath, New York area where we practice law, the median annual charge for a private room in a nursing home is $153,665 in 2018.
Medicaid is a jointly administered federal/state government health insurance program that will pay for nursing home care. This is why many elders seek Medicaid eligibility at some point in time. Now that you understand the lay of the land, we can look at some key Medicaid facts and figures.
Since Medicaid is intended for people with sparse financial resources, there is a modest asset limit. In most parts of the country, it is just $2000, but things are a little bit better for New York residents. At the time of this writing, the Medicaid asset limit in the Empire State is $15,150.
Some property that you probably have in your possession is not counted when Medicaid is determining your eligibility status. If you own a home, it would not be counted, but there is an equity limit. This is another thing that varies depending on the state in question, but in New York, it stands at $858,000 during this calendar year.
There are handful of other types of property that are not considered to be countable assets. If you own an engagement ring, a wedding ring, and/or heirloom jewelry, you can retain ownership of the jewelry and still qualify for Medicaid. The items that you have around your home are not counted, and personal effects would not impact your application.
You can have a prepaid burial plot and up to $1500 in whole life insurance. The same amount of money could be set aside to pay for a portion of your final expenses. Unlimited term life insurance is allowed, and you can retain ownership of one motor vehicle that is used as a primary source of transportation.
Rights of the Healthy Spouse
In many cases, a married person will require long-term care. The other spouse will still be capable of independent living. Under these circumstances, the healthy spouse is referred to as the community spouse in Medicaid parlance, and the community spouse would enjoy certain protections.
We have previously stated that there is an equity limit that is applicable to home ownership. When a healthy spouse is remaining in the home, there is no equity limit at all. The spouse that is living independently is also entitled to a Community Spouse Resource Allowance. This equates to half of the shared assets that are considered to be countable by Medicaid.
However, there is a limit, and on the high end it is $123,600 in New York in 2018. There is also a minimum Community Spouse Resource allowance of $74,820. This means that the healthy spouse can keep no less than this amount, even if it is more than half of the shared countable assets.
Under Medicaid rules, income that is received by the institutionalized spouse must be used to help pay for the nursing home care that is being received. However, if the healthy spouse is relying on all or some of this income, this requirement would be waived. A Monthly Maintenance Needs Allowance could be approved, and the amount of the allowance at the time of this writing is $3090 per month.
Attend a Free Workshop!
If you would like to learn more about Medicaid planning and other important topics, attend one of our upcoming workshops. They are free, and you can see the schedule and obtain registration information if you take a moment to visit our estate planning and elder law workshop page.