Like many people, you may have made it through your working years without giving Medicaid eligibility a second thought if you were fortunate enough to be covered under an employer-sponsored or privately purchased health insurance policy. As a senior, however, you may find that eligibility for Medicaid is crucial to help cover the high cost of long-term care. Your eligibility, in turn, will depend on several factors, including the value of your non-exempt assets. The Oklahoma City Medicaid planning attorneys at Parman & Easterday explain what assets count for Medicaid eligibility for seniors.
Why Might I Need To Qualify For Medicaid As A Senior?
Experts tell us that if you are close to retirement age right now (age 65), you stand close to a 70 percent chance of needing some type of long-term care (LTC) services before the end of your lifetime. If you are married, your spouse shares the same odds. If either of you ends up in nursing home care, the cost of that care could put your retirement nest egg at substantial risk unless you planned ahead by including long-term care and Medicaid planning in your comprehensive estate plan. Nationwide, the average cost of a year in LTC for 2017 was over $80,000. If you are an Oklahoma resident, you are fortunate to be facing LTC costs below the national average; however, you can still expect to pay, on average, about $60,000 for a year in LTC. Given that the average duration of a stay in LTC is three years, your total LTC bill could easily exceed $150,000.
What makes the high cost of LTC even more problematic is the fact that neither Medicare nor most health insurance policies will cover LTC expenses. If you did not you purchase a separate LTC insurance policy at an additional expense well ahead of time, you will be forced to pay out of pocket for your LTC expenses – unless you qualify for Medicaid which will cover long-term care expenses. It should come as no surprise that over half of all seniors currently in LTC rely on Medicaid to help cover the cost of their care.
Qualifying For Medicaid As A Senior – Which Assets Count?
Medicaid is a healthcare program that is primarily funded by the federal government; however, it is administered by the individual states. As such, the eligibility requirements can vary somewhat from state to state. Because Medicaid is a “needs-based” program though, all states impose income and asset limits. To qualify for Medicaid as a senior, your countable assets must not exceed $2,000 if you are applying as an individual. Certain assets are considered exempt, meaning they do not count toward your $2,000 limit. Exempt assets in Oklahoma include:
- One home with an equity limit of $572,000 if one of the following applies:
- You are planning to return to the home
- A spouse, a child under 21, or a disabled person resides in the home
NOTE: 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 automobile, no equity amount specified.
- A burial fund for an applicant and spouse with a value of $1,500 or less, each. If the money is placed in an irrevocable burial trust then $7,500 is exempt.
- Non-saleable property, household furnishings, furniture, clothing, jewelry, and other personal effects are not counted.
- Value of life insurance if face value is $1,500 or less. If it exceeds $1,500 in total face amount, then the cash value in these policies is countable.
Understanding what assets will count and what assets are exempt is imperative when planning ahead for the possibility that you will need to qualify for Medicaid because simply transferring countable resources in anticipation of applying for Medicaid will not work. Medicaid now employs a five-year look-back period that effectively discounts any asset transfers for less than fair market value completed within the five-year period prior to your application.
Contact Oklahoma City Medicaid Planning Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have questions or concerns regarding your ability to qualify for Medicaid, contact the experienced Oklahoma City Medicaid planning attorneys at Parman & Easterday by calling 405-843-6100 to schedule your appointment today.