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Medicaid Planning

      • This is a very good question.  Quite often, the concept of “Medicaid planning” seems counterintuitive. Since Medicaid is a program for people with limited financial resources, you would never intentionally try to put yourself in a threatening financial situation. While this is true for the most part, there is a reason why many elders seek Medicaid eligibility late in their lives. The Medicaid program will pay for a stay in a nursing home, and there is a Medicaid Home and Community Based Services waiver that will pay for in-home care. Medicare does not cover the custodial care that nursing facilities provide, and it will not pay for in-home care that is provided by a home health aide.

      • Yes, and costs have been rising over recent years. According to the state, the average annual cost for nursing home care in Oklahoma is about $65,000. The United States Department of Health and Human Services tells us that the average length of stay for an elder in a nursing home is one year. This being stated, over half of people that receive paid care need it for more than a year, and 13 percent receive paid assistance for more than five years. If you are married, you and your spouse could potentially be forced to deal with two different sets of nursing home bills.

      • There is a $2,000 limit on assets you can hold or own in your name.  That said, there are some types of property that do not count. Wedding rings, engagement rings, and heirloom jewelry are not counted.  In addition, an applicant can maintain possession of one motor vehicle. Furniture and other household items and personal belongings are not counted, and you can have unlimited term life insurance and up to $1,500 of whole life insurance. The same amount can be saved for final expenses, and prepaid burial plots are not countable assets.

      • If you are a homeowner, the property does not count as long as its value does not exceed the equity limit. At the time of this writing, the equity limit exceeds $600,000, and the figure is updated annually to account for inflation. There is no equity limit if a healthy spouse is remaining in the home. The fact that you can qualify as a homeowner is positive on the one hand, but it is a situation that you want to avoid. In most states, Medicaid will seek reimbursement from the estates of deceased beneficiaries, so they could place a lien on your home if it is in your possession at the time of your death.

      • Aside from the exempt property, all of the property that is owned by each individual in the marriage would be counted. However, the healthy spouse is entitled to a Community Spouse Resource Allowance (“CSRA”). The CSRA is half of the countable assets up to a limit that is just over $130,000 at the present time. There is also a Community Spouse Resource Allowance that is in the $26,000 range. Income that belongs to the spouse that is in a nursing home must be contributed toward the long-term care costs that are being incurred.  However, there is an exception made when a healthy spouse is relying on the income. The at home healthy spouse can continue to receive a Monthly Maintenance Needs Allowance (“MMNA”) up to a maximum allowance of approximately $3,200. We are not giving exact figures because once again, these numbers are indexed for inflation each year.  In some states, if the Community (at home) Spouse’s income is below that amount, they can re-allocate a portion of the income of the nursing home spouse up to the MMNA limit.

      • You can make direct gifts or fund an irrevocable trust by gift to transfer assets out of your name with Medicaid eligibility in mind. However, you have to act in advance, because there is a five-year look back period. All divestitures must be completed at least five years before you submit your application for Medicaid coverage.  If the five years has not lapsed, there will be a requirement to spend down assets.

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We are here to help if you are ready to work with an Oklahoma City elder law attorney to develop a nursing home asset protection plan. You can send us a message to request a consultation appointment, and we can be reached by phone at 405-843-6100.