If you have paid into the program sufficiently throughout your working life, you will qualify for Medicare as a source of health insurance when you reach the age of 65. This is the eligibility age at the time of this writing, but it is something that you should keep an eye on as time goes on. There have been talks among legislators about raising the age in an effort to reduce spending.
When you know that you are going to qualify for Medicare as a senior citizen, you may feel a certain peace of mind with the knowledge that all medical related expenses will be covered. In fact, this is not entirely true. The majority of seniors will eventually need help with their activities of daily living, and many of them will reside in nursing homes and assisted living communities. Medicare will not pay for a stay in one of these facilities, because it is considered to be custodial care rather than medical or convalescent care.
Medicaid is the solution for a very significant percentage of Americans that require long-term care as senior citizens, because it will pay for living assistance. Let’s look at five things that you should definitely know about Medicaid conveyed in a question and answer format.
I know that Medicaid is for people with limited resources. What are the asset and income limits?
Your assets must not exceed $2000 if you want to qualify for Medicaid coverage to pay for long-term care.
Does this $2000 include the value of my home?
There is some good news to pass along on this front. Your home is not considered to be a countable asset, but there is an equity limit. It changes slightly incrementally to account for inflation, but at the present time, it stands at $572,000.
If you are married and you are applying for Medicaid while your spouse is still capable of remaining at home, there would be no equity limit at all.
Aside from the home, are there any other assets that are not counted?
Yes, there are a number of different non-countable assets. One vehicle that is used as a primary source of transportation is not counted, and your wedding ring, your engagement ring, and any heirloom jewelry that you may have in your possession would not be counted. Personal effects and ordinary household items are not countable assets for Medicaid purposes. You can have unlimited term life insurance and up to $1500 in whole life insurance. Burial plots are not countable assets, and you can have as much as $1500 set aside for final expenses.
Is there any way to qualify if my income exceeds the limit?
It is true that there is an income limit that governs Medicaid eligibility. However, there is a Medicaid planning strategy that can be utilized under these circumstances. You could convey all or some of your income into a Miller Trust, a vehicle that is alternately referred to as a Qualified Income Trust.
In addition to the fact that there is no home equity limit, does the healthy spouse have any other property rights?
The healthy spouse, which is referred to as the “community spouse” in Medicaid terminology, is entitled to certain considerations. There is a Medicaid Community Spouse Resource Allowance that allows the healthy spouse to keep half of the countable assets up to a certain limit.
As we mentioned previously, there is an income limit, but the community spouse can continue to receive income that is brought in by the institutionalized spouse if it is needed to provide a basic standard of living. This is called the Medicaid Monthly Maintenance Needs Allowance.
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If you find yourself here, you are looking around trying to find information about important elder law matters like Medicaid planning. You can learn a great deal more if you attend one of the upcoming seminars are being held by our Mount Clemens elder law lawyers. There is no charge, but we do ask that you register in advance, because seating is limited. You can visit this page to look at the schedule and obtain registration information.