Many seniors are surprised when they realize they may need to rely on Medicaid to help them cover the often exorbitant costs associated with long-term care. Even more worrisome are the eligibility guidelines that include both income and asset limits. These guidelines can put your retirement nest egg at risk if you find yourself in need of the benefits offered by Medicaid, yet you failed to plan ahead. Fortunately, not all assets are counted when determining if you qualify for Medicaid in Connecticut.
Why Would I Need to Qualify for Medicaid?
Experts tell us that if you are close to retirement age right now (age 65), you stand close to a 70 percent chance of needing some type of long-term care (LTC) services before the end of your lifetime. If you are married, your spouse shares the same odds. If either of you ends up in nursing home care, the cost of that care could put your retirement nest egg at substantial risk unless you planned ahead by including long-term care and Medicaid planning in your comprehensive estate plan.
Nationwide, the average cost of a year in LTC for 2017 was over $80,000. If you are a Connecticut resident, however, you can expect to pay some of the highest LTC costs in the country. That same year, the average yearly cost for a private room in an LTC facility was $162,060 in Connecticut. With an average stay of three years, your total LTC bill could easily near $500,000 – and that is if you needed care today. Naturally, with every year that passes the cost of LTC will increase.
Like many seniors, you may rely on Medicare to cover most of your health care expenses once you retire, you won’t be able to turn to Medicare for LTC expenses because Medicare won’t cover them. Neither will most health insurance policies which is why over half of all seniors currently in an LTC facility rely on Medicaid for help paying their bill. For Medicaid to help though, you must first qualify for benefits.
Will I Qualify for Medicaid?
Because Medicaid is a “needs-based” program that is intended to help low-income individuals and families with health care expenses, the program uses both income and assets limits when determining eligibility. An applicant cannot own countable resources (assets) valued at more than the limit or the application will be turned down. As an individual applicant, your countable resources cannot exceed $2,000. For a married couple, the limit is $3,000. Fortunately, some assets are exempt from consideration when determining eligibility. In Connecticut, common exempt assets include:
- One home up to an equity limit of $858,000 IF you are planning to return to the home OR a spouse, a child under 21, or a disabled person resides in it.
- One vehicle
- Burial plots
- Trusts for disabled individuals under 65, which qualify under 42 USC 1396p(d)(4)(A)
- Annuities that meet certain criteria
- Transfers of assets to disabled children and to “caregiver children” who meet certain criteria, do not create a penalty.
If your non-exempt assets exceed the limit, your application will be turned down and you will be required to “spend-down” those assets before Medicaid will approve your eligibility. In reality, this means you will have to use those assets to cover your LTC expenses until the value of your assets has diminished to the point where Medicaid finds you eligible. Furthermore, Medicaid’s five-year “look-back” rule prohibits you from transferring your non-exempt assets at the last minute in anticipation of the need to qualify for Medicaid. The key, therefore, to protecting your assets and ensuring that you qualify for Medicaid is to include Medicaid planning in your comprehensive estate plan long before you find yourself in need of help paying your LTC bill.
Contact Connecticut Medicaid Planning Attorneys
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about qualifying for Medicaid, contact the experienced Connecticut Medicaid planning lawyers at Nirenstein, Horowitz & Associates, P.C. by calling (860) 548-1000 to schedule an appointment.