It is natural to feel a certain sense of security when you know that you will qualify for Medicare as a source of health insurance when you are 65. There are out-of-pocket expenses that you have to pay yourself, but if you retire with some resources and income, you should be able to manage them.
This being stated, there is one complete void in the coverage that is not easy to overcome on your own. Medicare will not pay for a stay in a nursing home, and it does not cover in-home care.
About 70 percent of all seniors will require help with their activities of daily living. According to the United States Department of Health and Human Services, just over one third of them will eventually live in nursing homes.
Medicaid is another government health insurance program, and it does cover nursing home care. Since it is a need-based benefit, you cannot qualify if you have assets to speak of in your name.
New York Medicaid Eligibility Guidelines
We are going to look at the spouse allowances in the next section, but we have to provide the necessary background information first. There is a $15,750 limit on countable assets in New York in 2020.
Some forms of property that you own may not count under certain circumstances, including your home with an equity limit of $893,000 this year. There are some other non-countable assets, but they are not extremely significant, and we will cover them in another post.
Medicaid Healthy Spouse Allowances
We touched upon the asset limit for home ownership, but there is no asset limit for the home if a healthy spouse will be remaining in the home.
Medicaid uses the term “community spouse” to describe a healthy spouse that can continue to live independently after their spouse enters a nursing home. This partner is entitled to a Medicaid Community Spouse Resource Allowance.
It is equal to half of the shared assets that are countable under Medicaid rules. However, there is a limit, and in our state it is $128,640 this year. The minimum is $74,820, even if this is more than half of the total.
The spouse that is going to use Medicaid to pay for living assistance must contribute almost all of their income toward the cost of the care they are receiving, with one exception. When a healthy spouse is relying on this income, they can receive a Monthly Maintenance Needs Allowance.
This is another allowance that has a limit, and it stands at $3,216 in 2020. Each year, there are adjustments to account for inflation, so the allowance figures will be somewhat higher next year.
Gift Giving to Gain Eligibility
You can give gifts to your loved ones before you apply for Medicaid to develop the right financial profile. However, you cannot divest yourself of assets today, apply tomorrow, and gain eligibility in a couple weeks. This reactive approach has been shut down through the implementation of the five-year look back period. The default rule is that gift giving must be completed at least five years before the application for eligibility is submitted. However, with proper planning, the five-year lookback period often can be avoided.
Schedule a Consultation Today!
We are here to help if you are ready to discuss Medicaid planning with a licensed attorney. You can schedule a consultation appointment if you give us a call at (585) 546-1734. There is also a contact form on this site you can use to send us a message.