Although you may not realize it yet, there is a very good chance that you (or a spouse) will need to qualify for Medicaid as a senior to help cover the high cost of long-term care. With that in mind, it is a good idea to clear up some of numerous myths and misconceptions about Medicaid eligibility and benefits. One of the most common of those misconceptions is the belief that you cannot own a home and qualify for Medicaid. The Oklahoma City Medicaid planning attorneys at Parman & Easterday clear up the rules about owning a home and Medicaid eligibility.
Why Might You Need to Qualify for Medicaid?
Your odds of needing some type of long-term care (LTC) services increase as you age. When you enter your retirement years you are already looking at about 50-50 odds of eventually needing LTC and the cost of that care is high. Nationwide, the average cost of a year in LTC in 2018 was almost $100,000. Oklahoma residents are fortunate in that they can expect to pay considerably less than the national average at just over $63,000 per year for 2018. With an average length of stay of three years, the cost of LTC can add up quickly if you are forced to cover the cost yourself – which is a very real possibility. Although you may depend on Medicare to pay healthcare expenses as a retiree, Medicare won’t cover LTC expenses. Neither will most health insurance policies. Fortunately, Medicaid does cover LTC expenses; however, you may face challenges qualifying for Medicaid if you failed to plan ahead. Your home though is not likely to be an obstacle to eligibility.
Can I Own a Home and Still Be Eligible for Medicaid in Oklahoma?
Because Medicaid is a “needs-based” program, applicants cannot have income that exceeds the program limit nor own assets that are valued above the program limit. The asset, or countable resources, limit is where some seniors run into problems. As an individual applicant, you cannot own countable resources valued above $2,000. Fortunately, some assets are exempt from your countable resourcing when determining eligibility. In Oklahoma, common exempt assets include:
- One home up to an equity limit of $572,000 IF you are planning to return to the home OR a spouse, a child under 21, or a disabled person resides in it. Be aware, however, that in Oklahoma, the home loses its exempt status after the nursing home resident has been in the nursing home for a period of one full year. After one year, the state can then make a claim against it for Medicaid costs spent on the owner’s behalf.
- One vehicle (no limit on value)
- A burial fund for an applicant and spouse with a value of $1,500 or less, each.
- An irrevocable funeral trust valued at up to $7,500.
- Life insurance policies if the face value is $1,500 or less.
- Household furnishings, furniture, clothing, jewelry, and other personal effects.
As you can see, the average person will not be disqualified from Medicaid eligibility based on the home they own given the equity limit in Oklahoma.
If your non-exempt assets do exceed the limit, your application will be denied and you will be required to “spend-down” those assets before Medicaid will approve your eligibility. In reality, this means you will have to use those assets to cover your LTC expenses until the value of your assets has decreased to the point where they meet the Medicaid eligibility guidelines. Furthermore, Medicaid’s five-year “look-back” rule prohibits you from transferring your non-exempt assets at the last minute in anticipation of the need to qualify for Medicaid. Assets transferred in violation of the look-back rule could cause you to incur a waiting period, once again leaving you to pay for your LTC bill out of pocket. The key, therefore, to protecting your assets and ensuring that you qualify for Medicaid is to include Medicaid planning in your comprehensive estate plan long before you find yourself facing the need for long-term care.
Contact Oklahoma City Medicaid Planning Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding Medicaid eligibility in Oklahoma or about how to incorporate Medicaid planning into your estate plan, contact the experienced Oklahoma City Medicaid planning attorneys at Parman & Easterday by calling 405-843-6100 to schedule your appointment today.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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