If you have saved diligently for retirement as you have traversed your career path over the years, you may wonder why you would ever want to apply for Medicaid.
After all, Medicaid is a health insurance program for people who are financially needy, and you have resources. Plus, you would not need Medicaid anyway, because you will qualify for Medicare when you reach the age of 65.
This is a logical rationale, but in reality, many seniors who were never poor ultimately apply for Medicaid coverage. They do so because they need help with their activities of daily living, and Medicaid will pay for long-term care. Medicare will pay for convalescent care after surgery, but it will not pay for custodial care, which is the type of care you would receive in a nursing home.
Medicaid has a $2,000 asset limit for an individual, but some of what you own is not considered to be countable. Your home is not a countable asset, but there is an equity limit. In the state of Indiana in 2015, the equity limit is $552,000.
You can keep one vehicle that is used for transportation, and your household goods are not countable assets for Medicaid purposes. Your personal effects would not be counted, and you can keep your wedding and engagement rings.
If you are married, your spouse would be entitled to certain protections if you were to apply for Medicaid. We mentioned a home equity limit previously. When a healthy spouse is remaining in the home, there is no equity limit at all.
The healthy spouse can keep half of the shared countable assets up to $119,220. This is the limit that is in place for 2015, and these limits are adjusted on an ongoing basis to account for inflation.
This is called the Community Spouse Resource Allowance. In addition to the maximum, there is also a minimum Community Spouse Resource Allowance. Even if this figure is more than half of the shared countable assets, the healthy spouse can keep no less than $23,844.
Under Medicaid rules, income that is brought in by a person who is using Medicaid to pay for long-term care must be used to defray the cost of the care. However, if the healthy spouse is relying on some of the income to maintain a basic standard of living, this requirement is eased.
The healthy spouse could draw a Monthly Maintenance Needs Allowance from income that is due to the institutionalized spouse. During the current calendar year, the maximum allowance is $2,980, and the minimum is $1,966.
Medicaid Planning Report
We have provided a bit of basic information about spousal protections in this post. To learn more about Medicaid rules and regulations, download our special report.
The report is free, and you can click this link to get your copy: Indianapolis IN Medicaid Planning.