Change is life’s only constant. Sometimes these changes strike without warning. If you or a loved one has experienced a sudden illness or serious accident, you understand how abruptly everything can change. Are you or a loved one suddenly in need of nursing home care? Finding and affording quality care on short notice can be stressful and draining. We can help you determine the best options for care and how to qualify for Medicaid to help finance them.
Long-term care is expensive, and these costs only continue to increase as baby boomers age. Although the range varies depending on where you live, according to the Genworth Cost of Care Study for 2017, the national median annual cost of a private nursing home room is $97,455 with a 4% annual increase projected. With improved medical care, the average life span of adults also is increasing; this translates into more years of care at increasingly higher rates. Without some sort of financial assistance, these costs could be financially devastating. In fact, your entire life savings could be quickly depleted within a few years of needing long-term care. This is where Medicaid can help.
Medicaid is a joint federal and state program to assist those with low income and limited resources. While Medicare provides very limited long-term care coverage, Medicaid is much more extensive. However, because of its restrictions, qualifying for Medicaid can be extremely difficult. But paying for a nursing home without it could be all but impossible.
Although Medicaid requirements vary from state to state, they all share one common element: complexity. Each state specifies a maximum allowed income for individuals and couples in order to qualify for Medicaid. Also, the applicant’s total assets cannot exceed a specified amount called the Individual Resource Allowance, which is consistently very low, often as low as $2,000*. Although certain possessions, like your home and automobile, are “exempted” for purposes of determining Medicaid eligibility, this figure is still alarming. If the applicant is married, the process becomes more complicated. For the recipient to qualify for Medicaid in South Carolina, where the Community Spouse Resource Allowance is fixed at $66,480, the applicant’s spouse can only keep that amount. For the recipient to qualify for Medicaid in a range state, like North Carolina, the applicant’s spouse can keep only half the couple’s assets up to a Maximum Community Spouse Resource Allowance of $123,600. So, if a couple has the maximum $123,600** in assets, they must “spend down” to all but $2,000 (or whatever the state Individual Resource Allowance is) for the applicant and $61,800 for the spouse - on long-term care.
What can you do if the value of your “non-exempt” assets exceeds the $123,600* Maximum Community Spouse Resource Allowance? If you give your extra assets away, which seems like an obvious choice, you will encounter greater problems. Violating this “Transfer Penalty Rule” could disqualify you from receiving Medicaid for months or years, depending on how much you gave away.
If your need for nursing home care is immediate, time is not something you can afford to lose. Why? If you wait too long and your non-exempt assets fall below the maximum $123,600 limit, then the applicant’s spouse can only keep half of what is left … with $24,720** as the Minimum Community Spouse Resource Allowance. In other words, $61,800** truly is the Maximum Community Spouse Resource Allowance!
This is only a brief and oversimplified review of a few Medicaid rules, of which there are myriad more. Navigating them on your own could be a nightmare at best and subject you to penalties at worst. Fortunately, though, our experienced professionals can guide you through the Medicaid maze. We can advise you throughout the application process, ensuring that you retain the maximum income and total assets allowed by law.
Seek appropriate counsel before you apply for and seek to qualify for Medicaid. We can give you – and your family – peace of mind during a difficult and uncertain time. When dealing with Medicaid, legal advice is something you cannot afford to go without.
* The Individual Resource Amount varies from state to state.
** Since these amounts (e.g., the “Community Spouse Resource Allowance,” etc.) may be adjusted annually, these numbers may vary slightly depending on when the most recent figures are released.