We have been sharing some cost-of-living adjustments that impact the government benefit programs for seniors since the new year is upon us. Medicaid has now produced their updates for 2021, and we will take a look at some of their new numbers in this post.
But first, we will provide a basic overview so you understand why Medicaid is important for seniors that will qualify for Medicare.
Long-Term Care Costs
Seven out of every 10 seniors will need some type of living assistance. According to the United States Department of Health and Human Services, 35 percent of elders will reside in nursing homes.
The typical cost for a year in a nursing home in the Rochester area is over $170,000. You can double the potential costs if you are married, so these expenses could have a serious impact on your legacy.
A lot of people would assume that Medicare will pay for a stay in a nursing home since so many people require the care that they provide. Unfortunately, Medicare will not pay for long-term custodial care.
Medicaid covers long-term care, and this is why it should be on your radar even if you are going to qualify for Medicare when you are 65.
Medicaid Eligibility Parameters
Since Medicaid is a need-based program, there is an asset limit of $15,750 in New York in 2020. In some cases, the home is not a countable asset. However, there is an equity limit of $893,000 this year, and it is going up to $903,000 in 2021.
There are some other assets that do not count when Medicaid is determining an applicant’s eligibility status. One motor vehicle is allowed, and wedding rings, engagement rings, and heirloom jewelry are exempt. Household items and personal effects are not countable assets.
An applicant can have a prepaid burial plot and up to $1500 set aside for final expenses. The same amount of whole life insurance is permitted, along with a unlimited term life.
Healthy Spouse Allowances
Now that we have shared some of the basic information, we can move on to the allowances for the healthy spouse.
One of them is the Community Spouse Resource Allowance (CSRA), which is equal to half of the shared assets that are considered to be countable, but there is a limit. The CSRA in 2020 has been $128,640, and it will go up to $130,380 next year.
Most of a Medicaid beneficiary’s income must be contributed toward the cost of the care that is being received, but there is an exception to the rule. A healthy spouse can continue to accept the income if it is needed to maintain a reasonable standard of living.
This is called the Monthly Maintenance Needs Allowance, and the maximum allowance in 2020 has been $3216. Next year, it will go up to $3259.50 a month.
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If you already know that it is time for you to work with an attorney to put a plan in place, we are here to help. You can schedule a consultation appointment if you give us a call at 585-374-5210, and you can fill out our contact form if you would prefer to send us a message.