Even if you expect to qualify for Medicare as a senior citizen, you should still understand a bit about the Medicaid program. This is because of the fact that Medicare will not pay for living assistance. Most seniors will eventually need help with their day-to-day needs, and custodial care is very expensive.
Medicaid is relevant because it will pay for long-term care if you can qualify. However, Medicaid is a need-based program. You must be able to demonstrate financial need if you want to obtain eligibility.
There is an upper asset limit that you must stay within to qualify for Medicaid. In most Connecticut, it is approximately $1600 for a single person.
The program divides countable assets from non-countable assets. In other words, everything does not count when your assets are being tallied by Medicaid.
Assets that do not count would include your wedding and engagement ring and family heirloom jewelry, your household belongings and personal effects, one motor vehicle, life insurance policies valued at less than $1500, as much as $1500 that has been set aside for burial or cremation costs, and resources that have been conveyed into certain types of trusts.
Another asset that you may retain ownership of is your primary place of residence, but there is an upper equity limit. In 2014 the upper equity limit in the state of Connecticut is $814,000. However, if there is a healthy spouse remaining in the home, there is no equity limit.
When you are budgeting for the future, you should certainly keep potential long-term care costs in mind. When we say that long-term care is very expensive, we are not exaggerating. According to Genworth Financial, in 2013 the median annual cost for a private room in a nursing home in the state of Connecticut reached a whopping $155,125. A private one-bedroom unit in an assisted living community averaged just under $63,500.
According to a government survey, the average length of stay for someone receiving long-term care is around two years and three months.
Medicaid is the solution for a high percentage of seniors. In fact, Medicaid pays for most of the nursing home costs that are incurred by seniors in the United States. The way that you would stay within the upper asset limit would be to divest yourself of assets in advance of applying for the program.
To do this effectively, you must be cognizant of the five year look back. Your eligibility is delayed if you have given away assets within five years of applying.
Elder law attorneys assist people who would like to aim toward Medicaid eligibility in an intelligent and measured fashion. If you would like to discuss your personal situation with a licensed attorney, contact our firm to request a free consultation.