As a Mount Clemens Medicaid lawyer, I have many of the same conversations with people that are preparing for the eventualities of aging. We know the questions that are typically asked, so we have decided to provide a hypothetical question-and-answer session here to provide people with some solid foundational information.
Is long-term care covered by Medicare?
If you have worked and paid taxes for at least 10 years, or if your spouse has done this, you will qualify for Medicare when you reach the age of 65 under currently existing laws. The program would cover convalescent care after an injury or illness when recovery is anticipated. However, it will not pay for the custodial care that you would receive in a nursing home.
Most people never need living assistance, right?
It can be hard to envision yourself being unable to handle all of your own day-to-day needs when you have been self-sufficient all of your life. However, the way that you feel when you are in your 80s may be much different than it is when you are in your 60s. Plus, we should point out the fact that four out of every 10 people that are 85 years of age and older have contracted Alzheimer’s disease.
The United States Department of Health and Human Services maintains a website called longtermcare.gov. According to the site, 70 percent of people that are turning 65 will require help with their activities of daily living eventually. Many of them will reside in nursing homes.
Is nursing home care very expensive?
Yes, a stay in a nursing home can potentially consume a significant percentage of your legacy. In Michigan, the state has determined that the average cost for nursing home care is $8261 a month in 2018. If you multiply this figure by the 12 months in a year, you are looking at a figure that exceeds $99,000. This is the average, but some nursing homes are considerably more expensive.
How can I protect my assets in anticipation of these expenses?
It is possible to purchase long-term care insurance, but the premiums are very high if you obtain the coverage when you are older. The solution that most people embrace is Medicaid. This program will pay for long-term care if you can gain eligibility.
Medicaid is only available to people with very limited financial resources, right?
This jointly administered federal/state government health insurance program is intended for financially needy individuals and families. The limit on countable assets is just $2000 at the time of this writing.
You say “countable” assets. Are there some assets that do not count?
This is a good question, and the answer is yes, there are some non-countable assets. Your home is not counted, but there is an equity limit. In 2018 in Michigan, the home equity limit is $572,000. If you have spouse that is going to remain in the home while you enter a long-term care facility, there would be no equity limit at all.
One vehicle that is used as a primary source of transportation is not counted, and you can have unlimited term life insurance and up to $1500 of whole life insurance. Wedding rings, engagement rings, and heirloom jewelry are not counted, and you can maintain possession of your personal belongings and household effects.
Can my spouse keep half of our assets if I apply for Medicaid?
The healthy spouse is entitled to a Community Spouse Resource Allowance, and it is equal to half of the shared countable assets. However, there is a limit that stands at $123,600 during the current calendar year. There is also a minimum Community Spouse Resource Allowance of $24,720.
To explain the minimum by way of example, let’s say that a couple has $30,000 of assets that are counted. Half of that is $15,000, but because there is a minimum, the healthy spouse would be able to keep $24,720.
Are you allowed to just give away assets to your family members when you find out that you need long-term care?
You certainly have a right to divest yourself of assets, but you cannot qualify for Medicaid if you give them away within five years of the date of your application submission. All gift giving must be completed at least 60 months before you apply. If you violate this rule, your eligibility is delayed.
As we have stated, the state has determined that the average rate for a month in a nursing home in Michigan is $8261. If you gave away $82,610 last year, and you apply for Medicaid today, your eligibility would be delayed by 10 months.
Attend a Free Seminar!
If you would like to learn more about nursing home asset protection other important topics directly from a Mount Clemens Medicaid lawyer, attend on of our seminars. They are free, and you can visit our seminar schedule page to see the dates and obtain registration information.