Before we pass along some important figures, we should explain why Medicaid planning should be on your radar. If you have paid FICA or self-employment taxes for at least 10 years, you will qualify for Medicare when you reach the age of 65. That’s the good news, but the bad news is that this program will not pay for a stay in a nursing home.
Medicaid will pick up the tab if you can gain eligibility, but you are probably aware of the fact that it is only available to people with very sparse resources. It is possible to plan ahead in advance with Medicaid eligibility in mind, and this is a major area of specialization for elder law attorneys.
Let’s look at some key numbers that you should be aware of when you are considering the subject of nursing home asset protection.
35%/12 Months
According to the United States Department of Health and Human Services, 35 percent of seniors will ultimately spend time in nursing homes, and the average length of stay is 12 months. Since more than one third of elders will need this level of care eventually, you should certainly take the possibility seriously.
$155,125
This is the median charge for a year in a private room in a nursing home in Staten Island according to Genworth Financial. If you are married, you should be prepared to address two different rounds of nursing home costs.
$15,900
You cannot qualify for Medicaid in the state of New York if your countable assets exceed $15,900 in value. This isn’t much in the big picture, but it is only $2,000 in most other states.
$906,000
Take notice of the fact that we used the qualifier “countable” assets in the previous section. Some pieces of property that you may have in your possession are not counted, including your home. However, there is an equity limit that stands at $906,000 in New York in 2021. The downside is that, without planning, the government will seek to recoup Medicaid benefits you receive after you pass away. So while your home is exempt for Medicaid eligibility purposes without proper planning it will recoup the cost of the benefits you receive from your exempt home potentially leaving you with nothing to pass along to family members.
In addition to your home, you can maintain ownership of one vehicle, wedding and engagement rings, heirloom jewelry, household items, and personal effects. There is no limit on the amount of term life insurance you can carry, and you can have up to $1500 worth of whole life insurance.
$130,380/$74,820
If you are married and you need nursing home care while your spouse is still capable of independent living, the healthy spouse would be entitled to a Medicaid Community Spouse Resource Allowance. This is equal to half of the shared assets that are considered to be countable under program rules, but there is an upper limit of $130,380 this year.
In New York, there is also a minimum Community Spouse Resource Allowance that stands at $74,820 in 2021. Even if it is more than half of the shared assets, this is the minimum amount that can be retained by the healthy spouse.
$3259.50
Generally speaking, income that is brought in by a person that is using Medicaid to pay for nursing home care must be contributed toward the cost of the care that is being received. One caveat would be that this requirement is waived if a healthy spouse is relying on the income to maintain a minimal standard of living.
This is called the Medicaid Monthly Maintenance Needs Allowance, and there is a maximum of $3259.50 during the current calendar year.
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