If you have done well throughout your life, and you expect to qualify for Medicare when you reach the age of 65, you may wonder why Medicaid should be on your radar. This is understandable, but in fact, this program becomes quite relevant to a very significant percentage of senior citizens at some point in time.
The Medicare program pays for convalescent care after surgery or an injury of some kind, but it does not pay for custodial care. This is the type of assistance you would receive in a nursing home. If you are thinking that it is unlikely that you will have require this type of care, you should understand some very important facts.
According to the United States Census Bureau, the oldest segment of the population is growing more rapidly than any other. If you are not yet receiving Social Security, you will become eligible when you are between 66 and 67 years of age. Once you reach this age group, it is statistically likely that you will live until you are in your mid-80s and perhaps beyond.
When you are enjoying your active retirement years, you may well be able to live with complete independence. However, once you become an octogenarian, things can be entirely different. In fact, the threat of Alzheimer’s disease alone is enough to get your attention. This disease strikes about 40 percent of people that are 85 years of age and older. Clearly, many people with Alzheimer’s disease will require nursing home care.
Nursing Home Costs
Getting out a checkbook to pay for a nursing home out of your savings is not a very pleasing proposition. Long-term care is expensive all over the country, but the numbers in the Mount Clemens area are higher than the national averages. According to Genworth Financial, the median charge for a year for a private room in a nursing home in our area is over $129,000.
Assisted living communities cost about $50,000 annually. If you combine two or three years in an assisted living facility with an additional stay in a nursing home, the overall figures can be staggering. Even in-home health aides are extremely expensive, and in fact, you would pay less to reside full time in an assisted living community.
Nursing Home Asset Protection
Now that you have the necessary background information, we can come full circle. The reason why Medicaid is important to many seniors that qualify for Medicare is because Medicaid will pay for a stay in a nursing home. Since it is intended for people with sparse resources, there is a $2000 limit on assets that are countable.
However, there are some things that do not count. These would include your home (though there is an equity limit of $585,000 at the time if this writing), your vehicle, your personal effects and household items, your engagement ring, your wedding ring, and your heirloom jewelry.
There are also parameters in place with regard to property that a healthy spouse can keep when his or her spouse is applying for Medicaid coverage. In Medicaid terminology, the healthy spouse is referred to as the “community spouse.” There is no equity limit at all on the home under these circumstances, and the partner that is living independently is entitled to a Community Spouse Resource Allowance. This is equal to half of the shared assets that are countable, but there is a limit that is $126,420 at the time of this writing.
Once you determine exactly what you are allowed to keep, you can engage in a process called a Medicaid spend down to divest yourself of assets so you can qualify for eligibility. This is where expert legal guidance can be invaluable, because timing is everything. There is a five-year Medicaid look-back period. You are penalized, and your eligibility is delayed if you give away assets, or convey resources into a trust, within 60 months of submitting your application for Medicaid coverage.
Contact our Clinton Township Medicaid Planning Lawyers Today!
As you can see, a great deal can be lost if you fail to plan ahead to brace yourself for future nursing home expenses. Everything that you have always intended to leave to your loved ones could wind up in the coffers of a long-term care facility.
Fortunately, we are well positioned to help you preserve your wealth for the benefit of the people that you love as you take the right steps to gain Medicaid eligibility. If you would like to connect with our Clinton Township Medicaid planning lawyers, click this link or call us at 586-493-7661 to request a free, no obligation initial consultation.