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Home » Medicaid » An Overview of Medicaid Protections for the Healthy Spouse

An Overview of Medicaid Protections for the Healthy Spouse

December 7, 2021 by Larry Parman, Attorney at Law

Medicaid planningJust over half of senior citizens will need paid long-term care, and 35 percent of elders will move into nursing homes  at some point.  As you might imagine, nursing home care is very expensive.

In the state of Oklahoma, the average cost for a day in a nursing home is $179.57.  This equates to over $65,500 for a year, and 12 months is the average length of stay.

This is a lot of money to come up with late in your life after many years of retirement.  Medicare does not cover these costs.

Medicaid Eligibility

The Medicaid program covers nursing home care for those eligible.  In fact, most seniors in nursing homes are Medicaid beneficiaries. This benefit is only available to people that can prove they have a significant level of financial need.  The asset limit is $2000.

Allowances for a Healthy Spouse

There are certain Medicaid protections for the healthy spouse. Ordinarily, the disabled spouse’s income is contributed toward the long-term care costs incurred.

This requirement is not enforced if the healthy spouse is relying on the income. He/she can receive a benefit called the Monthly Maintenance Needs Allowance, but there is a maximum threshold.  In 2021, the threshold stands at $3260 in the state of Oklahoma.

The healthy spouse can also maintain possession of half of the couple’s assets up to a certain limit. This is formally referred to as the Community Spouse Resource Allowance.  The maximum limit during the current calendar year is $130,380.

There is also a minimum allowance of $26,076.  A healthy spouse can keep this amount even if it is more than half of the assets.

Home Ownership

A home is not considered a countable asset for Medicaid eligibility purposes, but there is an equity limit. This year, the equity limit is $603,000 in Oklahoma.  However, there is no equity limit when a healthy spouse remains in the home.

Even though you can potentially qualify for Medicaid as a homeowner, it may be wise to avoid it.  For a homeowner, Medicaid could place a lien on the home during the estate recovery phase after your passing.  However, there are some exceptions to the rule.

No lien is attached if your spouse is still residing in the home.  The same rule applies for a minor, disabled, or blind child.  There is also a child caregiver exemption.

As an example, let’s say that your daughter is living in your home with you and providing care.  The level of assistance that she provides allows you to stay in your home.  If she has provided care for at least two years, you can give the home to your daughter, and avoid the Medicaid recovery mandate.

Five-Year Look Back Period

An irrevocable Medicaid trust may also be a good solution.  By conveying your home and other property to the trust, you establish a financial profile leading to Medicaid eligibility.  Under such a trust, you have no access to the principal, but you could accept distributions of the trust’s earnings.

If you apply for Medicaid at some point, the assets in the trust would be shielded, but timing is key. There is a five-year look back period, so you have to fund the trust at least five years before you submit your application for Medicaid coverage.

Schedule a Consultation Today!

Today is the day for action if you need an estate plan.

When you work with us, we will put you at ease and seek to understand your situation and legacy goals.  We will explain your options and provide recommendations so you can make informed decisions.

At the end of the process, you will walk away with a tailor-made estate plan that ideally suits your needs. If you are ready to get started, you can schedule a consultation at our Oklahoma City estate planning office.  Please call us at at 405-843-6100.  Or, use the the contact form on this site to send us a message.

  • Author
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Larry Parman, Attorney at Law
Larry Parman, Attorney at Law
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
Larry Parman, Attorney at Law
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Filed Under: Elder Law, Medicaid Tagged With: Community Spouse Resource Allowance, Medicaid planning, Monthly Maintenance Needs Allowance

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