LONG TERM CARE PLANNING AND MEDICAID QUALIFICATION REQUIREMENTS
Healthier lifestyles and advances in modern medicine mean that Americans are living longer into their 70’s, 80’s and 90’s. For healthy individuals this is additional time to enjoy life and time with their loved ones. However, for those with failing health, emotional and financial challenges can have a devastating impact. Many times, family members are overwhelmed by the burden of caring for a loved one that is mentally or physically declining. With the cost of a skilled nursing facility averaging $6,500 per month, only the wealthiest individuals can afford long term nursing home care. The $78,000 average cost of nursing home care will almost certainly result in the catastrophic loss of assets due to illness and impoverishment for the middle class.
Why Long Term Care Planning?
1. Save the individual’s assets to get the best care
2. Save the family’s assets to maintain the community spouses standard of living without spiraling into poverty
3. Save family inheritance and legacy for the children that may have special needs
Long Term Care Insurance?
Long term care insurance an insurance product that would pay for long term care.
In order to obtain long term care insurance you have to be medically eligible. Unfortunately, sometimes after review of medical records, applicants are rejected and receive the bad news that they will not be able to purchase this needed insurance at any price. If the cost of long term care is available and affordable, it is the main resource against the financial crisis caused by disability and incapacity.
Medicare:
Medicare does not cover chronic problems that cause an individual to need a nursing home or assisted living facility. Today, seniors live long enough to have the advent of chronic diseases such as dementia, Alzeimer’s, Parkinson’s and a long list physical problems.
Medicaid:
The only governmental program that provides benefits for chronic/custodial care is Medicaid.
A recent survey revealed that over 50 percent of the baby boomers (Americans born 1946 to 1964) falsely believe that Medicare will provide chronic/custodial care for themselves and their parents. People are shocked to find out Medicaid, with its strict asset and income limitations, is the only governmental benefit available.
The sad truth that many can afford a comfortable retirement until a fall, a stroke, heart attack, or a debilitating illness results in them needing assisted living or nursing home care.
The
The Medicaid Assistance program (“Medicaid”) is a federal health insurance program administered by the states. In
Program Eligibility Requirements
These are the requirements for Medicaid eligibility:
1. 65 years of age or older, blind or disabled
2. A
3. A
4. The applicant must be medically needy and residing in a Medicaid qualified nursing facility within 45 days of application, and
5. The applicant’s income and assets must not exceed certain specified levels
6. Income Limitations: Monthly income may not exceed $1,911 per month for 2008
7. Assets Limitations:
a. A single person may retain $2,000 in countable assets
b. If married, the applicant may retain $2,000 in countable assets and the spouse living at home may retain $104,400 in countable assets in 2008
c. A married couple where both are in the nursing home may retain $3,000 in countable assets
d. Countable assets: Bank accounts, certificates of deposit, stocks, bonds, retirement plans, IRA’s and Keogh plans, life insurance, and any other assets not otherwise exempt or excluded are countable assets for Medicaid purposes.
e. Exempt assets:
1. Homestead property up to value of $500,000 if the applicant intends to return to house or the community spouse or a dependent relative is residing in the home.
2. One car and a second car of 7 years old
and is not a luxury car or antique.
3. Household furnishings and personal effects up to $2,000 in value are exempt.
4. Life insurance with a cash surrender value of less than $2,500 is exempt. There is no limit on term insurance.
5. Cemetary plots for the applicant or applicant’s family are exempt.
6. Prepaid irrevocable burial contract with a cemetery or funeral home of any value are exempt.
Excludable or Noncountable Assets for Medicaid
7. Non liquid assets which are unmarketable. These may include a life estate in real or personal property which are determined to be unmarketable.
8. The fair market value of income producing property essential to self-support.
9. The value of pension plans, IRA’s, and Keogh plans which are being distributed to the applicant or the community spouse on an actuarial sound basis are excluded.
What will Medicaid pay?
The Medicaid program covers nursing home care, drugs, doctors, therapy, and medical equipment.