Many people are not aware of the fact that the Medicare program will not pay for a stay in a nursing home or assisted living facility, and it will not pay for in-home care. If you are thinking that you are not too concerned about this reality because it is unlikely that you will need living assistance, you should understand the facts.
The United States Department of Health and Human Services is charged with the responsibility of informing American citizens about the eventualities of aging. To this end, they maintain a very informative website called longtermcare.gov, and it would be a good idea to explore the site if you would like to educate yourself. There are many interesting statistics that get your attention, but there is one that really stands out.
They have found that seven out of every 10 people that are reaching 65 on any given day will eventually need help with their activities of daily living. In truth, if you roll the dice thinking that you will never need long-term care, you are trying to defy the odds. When you think about it, the way that you feel when you are 65 or 70 is one thing, but everything can definitely change when you are in your 80s or older.
Once you reach the age of 67, it is likely that you will live until you are at least 85 years of age according to the United States Social Security Administration. The Alzheimer’s Association is a great source of information about this disease. They have found that about 40 percent of people that are 85 years of age and older have contracted Alzheimer’s disease. Clearly, many people with Alzheimer’s disease are going to require long-term care eventually, and this is not the only reason why elders spend time in nursing homes.
As we stated in the opening, the Medicare program will pay for convalescent care after an injury or illness, but it will not pay for the custodial care that you would receive in a nursing home or assisted living facility.
Are you thinking about paying out of pocket if you have to move into a long-term care facility? If you are, you better have some very deep pockets. We practice law in Mount Clemens, Michigan, and in our area, the average cost for a private room in a nursing home is well over $100,000 per year, and some people spend multiple years receiving nursing home care. Everything that you have always intended to leave to your loved ones could wind up in the coffers of a nursing home if you have to pay for it yourself.
Medicaid and Countable Assets
For many people, the solution to this conundrum is Medicaid eligibility. This is a jointly administered federal/state government program that does pay for custodial care. You are probably aware of the fact that Medicaid is intended for people with very limited resources. As a result, there is an asset limit of just $2000 that governs Medicaid eligibility.
You may assume that you could never qualify for Medicaid because of the very low asset limit, but the good news is that there are some assets that are not considered to be countable for Medicaid purposes. If you own your own home, it will not be counted, but there is an equity limit. It changes year-by-year to account for inflation, but at the time of this writing in 2019, Medicaid home equity limit is $585,000. However, if you are married, and your spouse is remaining in the home as you enter a long-term care facility, there is no equity limit at all.
Speaking of your home, you do have to be aware of Medicaid recovery efforts. Under program rules, after you pass away, the Medicaid program is required to seek reimbursement from your estate during probate. If you are in direct personal possession of your home at the time of your passing, and your spouse is no longer living, the home could be attached. Fortunately, there are strategies that can be implemented to avoid this fate.
Other non-countable assets include one motor vehicle that is used as a primary source of transportation, wedding rings, engagement rings, heirloom jewelry, personal effects, household items, up to $1500 in whole life insurance, and unlimited term life insurance.
Attend a Free Seminar!
Our Mount Clemens nursing home lawyers are holding a number of free seminars over the coming weeks, and you can learn a lot more about Medicaid and long term care if you attend one of these sessions. Click this link to see the schedule and obtain reservation information.