When you are planning ahead for the future, you should take potential long-term care costs very seriously. The majority of elders will eventually need assistance with their activities of daily living. Medicare will not pay for long-term care, but Medicaid will. As a result, Medicaid planning is very important for many people.
As you go through life, you endeavor to put yourself in a position to enjoy your retirement years to the fullest. Most people will qualify for Medicare as a source of health insurance, and you may own your home outright. Proper planning will result in a nest egg to draw from, and Social Security will provide income. Many people have additional sources of income when they retire.
Medicaid is a program that is only available to people who can demonstrate significant financial need. When you have been successful, Medicaid planning can sound out of context.
In spite of this, the Medicaid program pays for most of the nursing home care that is received by seniors in the United States.
Long-term care is extremely expensive, and it can consume your resources in a hurry. A few years in a nursing home could absorb hundreds of thousands of dollars.
This is why Medicaid planning is important for people who were never especially needy.
Medicaid Limits and the Healthy Spouse
There are asset and income limits that you must stay within to qualify for Medicaid. The asset limit for an individual in most states is just $2,000, but everything that you own does not count.
To qualify for Medicaid, people divest themselves of assets before they apply. This is called a Medicaid spend down.
In many cases, one spouse will need long-term care while the other spouse is still capable of independent living. Under these circumstances, the healthy spouse can keep a certain store of assets.
The healthy or community spouse can continue to live in the family home with no equity limit. There is also a Community Spouse Resource Allowance. The healthy spouse can keep half of shared countable assets up to a particular limit.
In 2014, the maximum Community Spouse Resource Allowance is $117,240.
A single person who is using Medicaid to pay for long-term care would be required to contribute most of his or her income toward the cost of care. If you are married and you need care, this requirement could be waived if your spouse is relying on your income to maintain a minimal standard of living.
This is called a Monthly Maintenance Needs Allowance. The Maximum Monthly Maintenance Needs Allowance during the current calendar year is $2,931.
Learn More About Medicaid Planning
Medicaid planning can go a long way toward preserving the resources that you have earned throughout your life. If you would like to discuss Medicaid planning with a licensed elder law attorney, click this link to request a free consultation: Indianapolis Medicaid Planning.