Many people do not have to think about Medicaid because they get health insurance through their employers, and they know they will qualify for Medicare when they are seniors. This makes sense on the surface, but there is a reason why Medicaid is relevant to just about everyone.
In this post, we are going to answer a question that elder law attorneys often hear about Medicaid eligibility, but we will explain some details before we focus on that specific topic.
Paid Living Assistance
It can be difficult to envision a time when you will need someone else to help you manage your day-to-day needs. This being stated, it is equally hard to envision yourself as an octogenarian until you have the experience.
People in their 80s often require long-term care, and in fact, more than half of senior citizens will eventually need paid assistance. This is considered to be custodial care, and Medicare does not cover this type of care.
Long-term care facilities are very expensive all around the country, and the cost are particularly high in the Hartford, CT area. The state has determined that the average cost for nursing home care this year statewide is over $14,000 a month, and the average length of stay is one year.
Medicaid Coverage and the Monthly Maintenance Needs Allowance
You guessed it, Medicaid will pay for long-term care, and this is why you should gain an understanding of the program’s parameters. Since it is a need-based program, you cannot qualify if you have more than $1,600 in countable assets.
With regard to the question at hand, income that is brought in by the spouse that is in a nursing home must be contributed toward the cost of the care that is being received. However, an exception is made if a healthy, independent spouse needs the income.
They can receive a Monthly Maintenance Needs Allowance, and the maximum allowance in 2023 is $3,715.50. There is also a minimum allowance that stands at $2,288.75 this year.
Community Spouse Resource Allowance
There is another provision that benefits the healthy spouse. They are entitled to a Community Spouse Resource Allowance, which is equal to half of the assets. At the present time, the maximum allowance is $148,620 in Connecticut, and the minimum is $50,000.
Non-Countable Assets
We touched upon the $1,600 asset limit, but it is important to understand the fact that some assets are not countable for Medicaid purposes. Your home is the most valuable asset that is not counted, but there is a $1.033 million equity limit during the current calendar year.
A motor vehicle is not counted, and heirloom jewelry, wedding rings, engagement rings, household items, and personal effects are exempt.
Medicaid Estate Recovery
You can qualify if you own a home, but this is not a good idea because of the Medicaid estate recovery mandate. If you pass away while you are in direct possession of a home as a Medicaid beneficiary, the program can place a lien on the property.
Medicaid Trust and the Five-Year Look Back Period
A nursing home asset protection strategy can be based on the utilization of an irrevocable trust. You can convey your home and other assets into the trust. Income-producing assets would be ideal because you could accept distributions of the trust’s income until you apply for Medicaid.
Unfortunately, you cannot find out that you need long-term care today, fund the trust tomorrow, and qualify for Medicaid next week. There is a five-year look back period, so the funding must be completed at the 60 months before your application submission date.
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