At some point, the mental and physical changes that occur as a result of the natural aging process may cause you to need the type of care that can only be provided by a long-term care facility. The high cost of long-term care, however, may cause you to turn to Medicaid for help. One concern many seniors have when considering Medicaid as an option is how relying on Medicaid will affect their spouse who plans to remain in the community. To help you better understand how relying on Medicaid might affect your spouse, the Medicaid planning attorneys at DeBruyckere Law Offices explain the Medicaid Minimum Monthly Needs Allowance.
Will You Need Long-Term Care?
Like most people, you likely hope to grow old in your own home without ever needing to enter a long-term care facility. Statistically speaking, however, you stand more than a 50 percent chance of needing long-term care (LTC) at some point after you reach retirement age (age 65). Those odds continue to increase the longer you live. At age 85, you will stand a 75 percent chance of needing LTC before the end of your life. Because the chance of needing LTC is very real, it only makes sense to plan for the possibility that you will need to pay for LTC at some point in the future.
What Will LTC Cost You?
Healthcare costs in general are extremely high in the United States. It should come as no real surprise then to find that the cost of LTC is also high. For the year 2019, the average cost of a year in LTC nationwide was over $100,000. Massachusetts residents paid, on average, considerably higher than the national average at almost $156,000 for that same year. With an average length of stay of about three years you are looking at an LTC bill of close to $500,000. Because neither Medicare nor most private health insurance policies will cover expenses related to LTC, many seniors faced with the need to pay for LTC turn to Medicaid for assistance.
Medicaid Eligibility Basics
To get help from Medicaid with your LTC expenses, you must first qualify for the program. The Medicaid eligibility guidelines impose both an income and a “countable resources” (assets) limit. Typically, a couples’ income and assets are combined for the purpose of determining Medicaid eligibility. If a couple’s assets exceeded the program limit, those assets must be “spent-down” (sold or transferred) until their value drops below the limit. If the need to qualify springs from the fact that one spouse is in LTC, the spend-down requirement would clearly leave the other spouse (referred to as the “community spouse”) with no resources. Fortunately, the Medicaid “Spousal Impoverishment” rules protect a community spouse.
Understanding the Minimum Monthly Maintenance Needs Allowance
In Massachusetts, Medicaid’s asset limits are $2,000 for an individual applicant, and $3,000 for married couples applying together. While the low asset limit isn’t a problem for the spouse going into LTC, it would leave the community spouse with virtually nothing. The good news is that if one spouse of a married couple does not require long-term care, they are subject to the Massachusetts Community Spouse Resource Allowance (CSRA). The community spouse can keep non-exempt resources owned by one or both spouses worth up to a maximum of $128,640.
In addition, the “Minimum Monthly Maintenance Needs Allowance,” or “MMMNA” allows the community spouse to keep part of the institutionalized spouse’s income if the community spouse has a low monthly income. The community spouse can keep part of the institutionalized spouse’s income if the community spouse has an income of less than $2,113.75 per month. The maximum amount a community spouse may keep is $3,216 per month depending upon living expenses.
Contact Massachusetts Medicaid Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions about Medicaid planning, contact the Massachusetts Medicaid planning attorneys at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.
Should I purchase long-term care insurance?
Long-term care insurance is a separate policy that only covers expenses related to LTC. Before you decide to purchase a policy, consider what the policy will cost you over the course of your lifetime versus what the policy covers if you do need LTC.
Can’t I just transfer assets to my adult child when I need to qualify for Medicaid?
No. Medicaid uses a look-back rule that effectively prohibits the transfer of assets for less than fair market value during the five-year period prior to applying for benefits.
Medicaid planning uses legal tools and strategies to protect your assets while simultaneously ensuring that you qualify for Medicaid if you need to down the road.