If you are going to qualify for Medicare when you reach the age of 65, you may assume that Medicaid would never be relevant to you. The health insurance will be there, and you wouldn’t qualify for Medicaid anyway, because you are going to have assets.
This is a logical perspective, but there is a very good reason why anyone that is looking ahead toward the future should learn about the Medicaid program.
Long-Term Care
The United States Department of Health and Human Services maintains a useful website called LongTermCare.gov. Its very existence tells you something about the importance of the subject. There are many eye-opening facts there, and one of them immediately gets your attention.
Seven out of every 10 people that are 65 years of age and older are going to need living assistance eventually. Some of them will be able to receive the care that they need from family members and friends at home, at least for a while.
But at the end of the day, 35 percent of seniors will reside in nursing homes.
Medicare will pay for convalescent care after an injury or illness when recovery is anticipated. It will not pay for the custodial care that you would receive in a nursing home.
Stifling Costs
It is not easy to get out a checkbook and pay for nursing home care out of your own pocket. Our office is located in Smithtown, New York. According to research that has been conducted by Genworth Financial, the median annual charge for a year in a nursing home in our area was over $192,000 in 2019.
The average length of stay is 12 months. It is worthwhile to note that costs have been rising, and married couples may face two different rounds of nursing home expenses.
Medicaid Planning
Now that we have set the stage appropriately, we can get to the point. The Medicaid program will in fact pay for long-term care, and this is why it should be on your radar, even if you will qualify for Medicare.
In 2020, the Medicaid asset limit in New York is $15,750. This can sound like a very low sum of money, and it is, but we actually get a break in our state. In most states in the union, the limit is $2000.
There are some assets that are not considered to be countable for Medicaid purposes. One of them is your home, but there is an equity limit. In the Empire State, this limit is $893,000 during the current calendar year. It should be noted that there is no equity limit if a healthy spouse is remaining in the home.
Other assets that do not count include one motor vehicle, wedding rings, engagement rings, and heirloom jewelry. Furniture and other household goods are not counted, and personal belongings are exempt.
An applicant can have as much is $1500 in whole life insurance and the same amount saved for final expenses. Unlimited term life insurance is permissible, along with a prepaid burial plot.
When it comes to the assets that are countable, you could give them to loved ones that would be inheriting them someday anyway. However, timing is key, because there is a five-year look back period. You are penalized and your eligibility is put on hold if you violate this rule.
Schedule a Medicaid Planning Consultation!
We would be more than glad to help if you would like to discuss Medicaid planning or any other estate planning or elder law matter with a licensed attorney. Given the fact that life has become very different with regard to interactions, we have made adjustments.
You can consult with us remotely, so you get the same personalized attention without taking any risks. If you would like to set the wheels in motion, send us a message or give us a call at 631-265-0599.
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