As a senior, there is a very good chance that you, or your spouse if you are married, will need long-term care at some point. The cost of that care will not be cheap. In fact, if you failed to plan ahead, your long-term care (LTC) costs could deplete your retirement nest egg in short order. Fortunately, Medicaid may be able to help. You may, however, have heard people talk about the Medicaid eligibility rules and the fear that those rules will leave the community spouse without resources. At one time, that was a legitimate concern; however, Medicaid enacted the Spousal Impoverishment Rules to ensure that a community spouse no longer has to worry about being left penniless and without resources. To ensure that you understand where you stand, the Andover Medicaid attorneys at DeBruyckere Law Offices explain how the Medicaid Spousal Impoverishment Rules work in practice.
Will You Need Nursing Home Care?
Although we all hope to live out our “Golden Years” in our own home, the reality is that the longer you live, the higher the odds are that you will eventually need nursing home care. When you reach retirement age, around age 65, you will already stand a 50 percent chance of eventually needing LTC. If you are still here at age 85, those odds will have increased to a 75 percent chance of ending up in a nursing home. Your spouse, of course, shares the same odds as you with regard to the need for LTC.
Paying for Nursing Home Care
As you may have heard, long-term care costs are high and expected to increase in the years to come. Currently (as of 2016), the average cost of a year in LTC across the nation is about $80,000. If you are paying for LTC in Massachusetts, however, you can expect to pay considerably more as the yearly average in the state was over $140,000 for 2016. By the year 2036, experts predict that number to be over $260,000. What makes the cost of LTC even more problematic is that neither Medicare nor most health care insurance will cover LTC expenses. Unless you can afford to cover LTC expenses out of pocket, that leaves Medicaid as your only source for assistance. Not surprisingly, over half of all seniors currently living in a LTC facility count on Medicaid to help them with their LTC costs.
Qualifying for Medicaid and the Community Spouse
Because Medicaid is a federal program intended to help low-income individuals and families with healthcare costs, the program uses both an income and an asset limit when determining eligibility. Consequently, an applicant cannot normally own more than $2,000 worth of non-exempt assets if the applicant hopes to qualify for Medicaid benefits. Prior to the Spousal Impoverishment Rules, that meant that the spouse remaining in the community was left with no assets and very little income when Medicaid eligibility was necessary to help pay for nursing home care. Fortunately, that is no longer the case.
Prior to the Spousal Impoverishment Rules, the couples’ income and assets were combined for the purpose of determining Medicaid eligibility. If a couple’s assets exceeded the program limit, those assets had to be “spent-down” (sold or transferred) until their value dropped below the limit. The rules now call for a “division of assets.” All assets belonging to either spouse are added together, except for exempt assets. One-half of the total (but not less than $24,180.00 or more than $120,900 as of January 2017) is considered as the “spousal share” for the community spouse. The spousal share is protected from the Medicaid spend-down requirements, ensuring that those assets remain available for the community spouse to use.
A similar provision also allows the community spouse to keep some of the LTC spouse’s monthly income if the community spouse’s income is below the Minimum Monthly Maintenance Needs Allowance (MMMNA). The amount of the MMMNA is set by law and will vary each year depending on factors such as geographic area and household size.
Contact Andover Medicaid Attorneys
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about the Medicaid Spousal Impoverishment Rules, contact the experienced Andover Medicaid attorneys at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.