There’s no question that nursing home care is expensive. People in the U.S. are living longer than ever, and one of the greatest fears of older Americans is that they will have to move into a nursing home. This not only means loss of independence, but also a tremendous financial burden, as much as $12,000 per month in Rhode Island.
Those who do not plan ahead for nursing home care often find themselves wondering how they will pay for it. Most people pay with savings, but when the savings run out they need to turn to Medicaid.
We can assist you in planning for nursing home care in advance. Thereby protecting your assets while still allowing you to qualify for Medicaid.
If the need for nursing home care arises, we can also guide you through the lengthy Medicaid application process.
How much money am I allowed to have and still qualify for Medicaid?
The basic rule says that to qualify for Medicaid, you cannot have more than $4,000 of countable assets in your name. Countable assets will generally include all assets other than:
- Your primary residence;
- Personal property, such as clothes, furniture, jewelry, etc.;
- One motor vehicle; and
- Assets that for one reason or another cannot be accessed.
- Without the proper planning, you will have to spend all except for $4,000 of your savings until you can qualify for Medicaid.
Will the State take my home while I am on Medicaid?
No. Your primary residence is not a countable asset. Therefore, it will not be counted against the asset limit you are allowed to have for Medicaid eligibility, as long as, you intend to return home or your spouse or other dependent relative lives there. However, the State of Rhode Island will place a lien on the home upon your death for reimbursement of benefits you received. However, with the proper planning, you can prevent the State from putting a lien your home and seeking reimbursement.
Can I give my money and house away to my children and grandchildren to qualify for medicaid more quickly?
No. A major rule of Medicaid eligibility concerns the penalty for transferring assets. While there are a few exceptions, generally if you transfer assets, you will be ineligible for Medicaid for a period of time beginning on the date of the transfer.
Transferring assets to certain recipients will not trigger ineligibility. These recipients include:
- Your spouse;
- A blind or disabled child;
- A trust for a blind or disabled child; or
- A trust for the sole benefit of a disabled beneficiary under the age of 65.
In addition, special exceptions apply to the transfer of your home. You can transfer your home without a penalty to:
- Your spouse;
- A child under the age of 21 or who is blind or disabled;
- A trust for the benefit of a disabled beneficiary under the age of 65;
- A sibling who has lived in the home for the year prior to your entry into a nursing home and who already has an equity interest in the home;
- A child who has lived in the house for at least 2 years prior to your entry into a nursing home and who during that time provided care that allowed you to avoid entry into the nursing home.
I am on Social Security or collecting a pension. Will I have to give that income to the nursing home, if I am on Medicaid?
Yes. The basic rule is that you must pay all of your income minus certain deductions to the nursing home. The deductions include:
- A $50 per month personal needs allowance;
- Uncovered medical costs; and
- An allowance for your spouse who lives at home and needs income support.
How much money does my spouse get to keep if I am on Medicaid?
Special provisions exist to protect your spouse if you enter a nursing home so that he or she has the minimum support needed to continue to live in the community. Your spouse is entitled to keep one-half of the countable/available assets up to a yearly designated amount, called the Community Spouse Resource Allowance. Also, your spouse’s income will not be disturbed when you enter a nursing home. He or she will not have to use their income to support you if you are in a nursing home and receiving Medicaid benefits. And as stated above, your spouse may be entitled to keep some of your income if needed.