If you earn a good living and you have always received health insurance coverage through your employer or an exchange, you would have no reason to understand the Medicaid guidelines. You know that you will be covered until you become eligible for Medicare when you are 65.
This makes sense on the surface, but many elders become very interested in Medicaid eligibility at some point in time.
Why would this be the case?
Medicare will pay for convalescent care after an injury or illness when recovery is anticipated, but it does not extend to custodial care. This is the type of assistance that you would receive in a nursing home, and there are in-home health aides that provide custodial care.
Medicaid will cover long-term care costs, and this is why it can become quite relevant.
Nursing Home Costs
The state of Connecticut estimates that the average cost for a month in a nursing home in our state is $13,863. This equates to an annual charge of $166,356, and the average length of stay is one year. Just over half of people that receive paid care require the assistance for over a year.
Clearly, these numbers can add up if you spend considerable time in a nursing home
Medicaid and the Healthy Spouse
Since it is a need-based program, there is a $1600 limit on countable assets, but your home is not counted with a $906,000 equity limit this year. If a healthy spouse is remaining in the home while their spouse is entering a nursing facility, there is no equity limit.
Under other circumstances, income that is brought in by the institutionalized spouse must be used to defray the cost of the care that is being received. However, when a healthy spouse is relying on the income to maintain their standard of living, this requirement is set aside.
A healthy spouse is entitled to a Monthly Maintenance Needs Allowance which gives them the ability to continue to accept all or some of the income. The maximum allowance this year is $3259.50, and the minimum is $2155.
The healthy spouse is referred to as the “community spouse” in Medicaid plans, and they can receive a Community Spouse Resource Allowance. This is half of the assets that would technically be countable, but there is a limit of $130,380 this year. The minimum allowance is $26,076.
These figures are adjusted annually to account for inflation, and we have seen a good bit of inflation this year, so the limits will be somewhat higher in 2022.
Medicaid Estate Recovery
Medicaid will try to attach assets that remain in the estate of a deceased beneficiary. A home is not a countable asset, but it would be in play during the Medicaid estate recovery phase unless a healthy spouse is still residing in the home.
If you want to be prepared for future long-term care costs, you could establish and fund a Medicaid trust. This would be an irrevocable trust, so you would not have access to the principal, but you could receive distributions of the trust’s earnings until you apply for Medicaid.
A lot of people need the income that they get from assets that are invested, so you may not be spending the money anyway. Advance planning is necessary because you would be ineligible for Medicaid for a period of five years after you fund the trust.
You could also convey your home into the trust so that it would be protected from Medicaid estate recovery if there is no surviving spouse.
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You can see the dates if you visit our seminar schedule page, and when you identify the session that works for you, follow the instructions to register.
Need Help Now?
If you have already decided that you should work with a Glastonbury, CT estate planning lawyer to develop a plan, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 860-548-1000.
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