Long-term care is a very big factor to consider when you are planning ahead for your senior years. The United States Department of Health and Human Services has a website called LongTermCare.gov. There is a lot of good information on the site.
When you visit the site, a particular statistic jumps out at you: approximately 80 percent of people who are turning 65 will eventually need living assistance. We are talking about a likelihood, not a remote possibility.
If you have worked for any length of time during your life you will qualify for Medicare when you reach the age of 65. This is great, but Medicare will not pay for long-term care. A stay in a nursing home or assisted living community is very expensive, and it is particularly expensive in the state of New York. A year in a nursing home averages over $180,000.
Medicaid is a jointly run federal/state government health insurance program that will pay for long-term care. However, to qualify you must be able to fit within very modest income and asset limits. In most states, the countable asset limit for a single person is just $14,550.00.
If you are married and your spouse is applying for Medicaid to pay for long-term care, you may keep a certain share of the assets without impacting your spouse’s Medicaid eligibility.
Your home does not count even if you are single, but there is an upper equity limit that stands at $814,000 in New York in 2014. If you are married, there is no equity limit. If your home equity exceeds this figure and your spouse was to apply for Medicaid, you can remain in the home, and your spouse could still obtain coverage.
In addition to the family home, there are other assets that are not countable under Medicaid regulations. Family heirloom jewelry, wedding and engagement rings, personal effects, and one vehicle are not countable.
When it comes to the countable assets, the healthy or community spouse may retain half of these resources. This is called a Community Spouse Resource Allowance. The maximum allowance stands at $117,240 in 2014.
When someone is using Medicaid to pay for long-term care, his or her income must be contributed to the cost of care. However, there are protections for the healthy spouse with regard to the utilization of the income that is due to the institutionalized spouse.
There is a Monthly Maintenance Needs Allowance. This allows the healthy or community spouse to continue to use some or all of his or her institutionalized spouse’s income. In 2014, the amount of the monthly maintenance needs allowance in New York is $2931.
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In this post we have provided some targeted information. If you would like to learn more, download our free special report that takes a comprehensive look at Medicaid planning.
You can access the report through this link: Medicaid Planning Report.