Long-term care can seem like something that is only relevant to others, but in reality, everyone should take the matter seriously. We all get older, and you should prepare for the eventualities of aging so that you are not confronted with any unpleasant surprises as a senior citizen.
Most people will qualify for Medicare coverage at the age of 65, but Medicare does not pay for long-term care. Since nursing home care can cost $100,000 or more per year, this is a very significant hole in the coverage.
Medicaid does pay for long-term care, and it is a widely embraced solution. However, Medicaid is a need-based program, so it takes careful planning to qualify without losing anything in the process. In this post, we will look at a few basic facts that everyone should know about Medicaid and long-term care.
Limit on Countable Assets
In most states, the limit on countable assets for an individual is $2,000. This can sound like a very small amount of money, and it is, but there are things that you own that are not countable.
Your home is not a countable asset, but there is an equity limit of $552,000 in the state of Indiana during the current calendar year. One vehicle is not a countable asset, and an applicant can obtain eligibility without forfeiting possession of his or her personal property and household effects.
Wedding rings and engagement rings are not countable assets, and unlimited term life insurance is allowed.
Rights of Healthy Spouse
Though there is a $2,000 limit on countable assets for an individual applicant, when someone who is married is applying for Medicaid, the healthy spouse who can remain at home is entitled to certain property rights. One of them is the Community Spouse Resource Allowance. This would equate to half of the shared countable assets, but there is a limit of $119,220 in Indiana in 2015.
We touched upon the fact that there is a $552,000 equity limit on home ownership. When a healthy spouse is remaining in the shared home, there is no equity limit at all.
The healthy spouse may also be entitled to a Monthly Maintenance Needs Allowance. This would allow the healthy spouse to continue to utilize income that is due to the spouse who has entered a long-term care facility.
Five-Year Look-Back
People who are looking ahead toward future Medicaid eligibility often give gifts to their loved ones to get assets out of their own names. To do this with optimal efficacy, you have to complete the gift giving at least five years before you submit your application for Medicaid coverage.
If you were to violate this rule, your eligibility would be delayed.
Schedule a No Obligation Consultation
If you have concerns about the future, contact us through the following link to schedule a no obligation consultation: Indianapolis IN Elder Law Attorneys.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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