Why should you worry about Medicaid eligibility when you will qualify for Medicare when you are 65?
Simply put, Medicare does not cover long-term care. Nursing homes and in-home caregivers are very expensive, and 52 percent of elders will need paid care at some point according to the United States Department of Health and Human Services.
Medicaid will pick up the tab if you can gain eligibility, and this is why it is relevant even if you are going to qualify for Medicare coverage.
Healthy Spouse Allowances
This is a need-based program, so Medicaid evaluators examine your financial profile to determine your eligibility status. When a married person is applying for Medicaid, if they are approved, there are a couple allowances for the healthy spouse that can live independently.
One of them is the Community Spouse Resource Allowance. This is half of the assets up to a certain limit, and in 2021, the limit is $130,380. These figures are indexed annually to account for inflation, so the number will be higher next year.
There is also a minimum allowance of $74,820 this year. A healthy spouse can keep this much even if it is more than half of the assets.
Income that is brought in by the institutionalized spouse is contributed toward the cost of the care that is being received, but there is an exception made for married couples.
If the independent spouse needs the income, they can receive it in the form of a Monthly Maintenance Needs Allowance. The maximum allowance in New York during the current calendar year is $3259.50.
A home is not considered to be a countable asset for Medicaid eligibility purposes in some circumstances, but there is an equity limit that stands at $906,000 in our state this year. If a healthy spouse or a dependent child is living in the home, there is no equity limit.
Before you are relieved by this exemption, you should understand the Medicaid estate recovery process. If you are a Medicaid beneficiary, after your death, the program would be required to seek reimbursement from your estate.
A lien could be placed on your home if it is in your direct personal possession at the time of your passing unless your spouse is residing in the home. There is another exception made if a minor or certified disabled child is living in the home.
Medicaid Trust and the Look Back Period
You can convey your home and other assets into a special form of trust to develop a financial profile that will lead to Medicaid eligibility. If you have income-producing assets, you can put them into the trust, and you could continue to receive the income that is generated.
There is a five year “lookback period” that applies if you transfer your assets to the trust within five years before you submit your application. However, careful planning can avoid the harsh result of the lookback period.
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