We have previously cited the rather alarming spike we are seeing in the prices of long-term care. To recap, there is a study that is done every year by the MetLife Mature Market Institute that places the cost of long-term care under the microscope. In 2010 the average cost for a yearlong stay in a private room in a nursing home rose by 4.6% to more than $83,000. The cost of residence in an assisted-living facility rose at an even higher rate of 5.2%, coming in at just under $40,000 per year.
Unfortunately Medicare does not cover these costs, but under certain circumstances Medicaid will cover them. A lot of people work with the assumption that you cannot qualify for Medicaid if you have assets that exceed $1,600. This is technically true, but there are significant assets that you are allowed to keep that are not counted against you for the purposes of qualifying for Medicaid. And if you are married and your spouse needs nursing home care you as the community spouse are entitled to keep your share of the “countable assets” within certain limits.
The assets that do not count include the value of your home up to $750,000. You’re also allowed to retain ownership of one vehicle and your personal property, things like jewelry, furniture, clothing and personal effects, etc. Prepaid funeral arrangements and a limited amount of life insurance are also allowed.
In addition, the community spouse may retain ownership of half of the countable assets that existed on the “snapshot” date when with his or her spouse entered long-term care. Under federal law the first $21,912 in shared assets is retained by the community spouse even if it is more than half of the total, though some states have a a higher minimum. The maximum amount that can be retained is approximately $114,000 as of this writing. It should also be mentioned that the healthy spouse may continue to receive his or her income in its entirety and this does not impact the Medicaid eligibility of the institutionalized spouse.
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