The Medicaid program should be on your radar even if you have health insurance and you are going to qualify for Medicare as a senior citizen. Why would this be the case?
Medicare does not pay for a stay in a nursing home, and it does not cover in-home custodial care. This is a big deal, because nursing homes and in-home caregivers are extremely expensive.
You are looking at somewhere in the vicinity of $170,000 for a year in a nursing home in the Rochester area. The annual rate for a full-time home health aide will be close to the same amount.
According to the United States Department of Health and Human Services, 52 percent of seniors will need some type of paid care eventually. Over 30 percent will reside in nursing homes, and 13 percent of people that need paid care require the assistance for more than five years.
Medicaid does pay for long-term care, and you should understand the program parameters if you want to preserve your legacy for the benefit of your loved ones.
New York Medicaid Asset Limit
In just about every state in the union, the Medicaid asset limit is $2000. Here in New York, we have a slightly better arrangement, because the asset limit is $15,900. This is not a lot in the big picture, but it is a step in the right direction.
Non-Countable Assets
All assets are not countable for Medicaid eligibility purposes. In many instances one motor vehicle is not counted, and in some instances your home value is not counted; however, Medicaid can seize those items after your death. Also, Medicaid does not count wedding rings, engagement rings, or heirloom jewelry. Your furniture, appliances, and the other items that you have around the house are not counted, and personal belongings are exempt.
You can have a prepaid burial plot and a pre-paid funeral account. Whole life insurance with a face value of $1,500 or less is allowed, and an applicant can have unlimited term life insurance.
Spousal Allowances
The healthy spouse that can live independently while their spouse is entering a nursing home care keep half of the countable assets up to a limit. In New York, the limit is $130,380 on the high-end, and the minimum allowance is $74,820.
Income that is brought in by the spouse that is living in a nursing home must be contributed toward the cost of the care with the exception of a $50 a month personal needs allowance and an offset for health insurance premiums. However, this requirement is set aside if a healthy spouse is relying on the income.
They can receive all or some of it in the form of a Monthly Maintenance Needs Allowance. The maximum allowance in our state this year is $3259.50.
Medicaid Estate Recovery and the Child Caregiver Exemption
The fact that you can qualify as a homeowner is deceiving, because Medicaid would be required to seek reimbursement from your estate after your death. If the home was owned by you at the time of your passing, they would place a lien on the property.
There is an exception to this rule if an adult child has been acting as your caretaker while living with you in the home. If they have been doing this for at least two years, you could give the home to the child, and the property would be protected during the estate recovery phase.
Medicaid Trust and the Five-Year Look Back Period
You can fund a special Medicaid trust to transfer assets out of your name to qualify for coverage. However, this is a complex arrangement and must be done very carefully to avoid the harsh consequences of the five-year look back period.
Schedule a Nursing Home Asset Protection Consultation!
Long-term care costs are a looming threat, but you can ensure your own comfort and protect your legacy if you take the appropriate steps in advance. If you are ready to get started, we are here to help.
You can schedule an appointment with one of our attorneys if you call us at 585-374-5210, and you can use our contact form if you would rather send us a message.
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