When a family member needs long-term care—such as care in a nursing home or assisted living residence—it can be devastating. It is emotionally devastating to think that a loved one will need care with his basic needs for the remainder of his life. It is also financially devastating.
In the past five years, the cost of long-term care has risen dramatically. Long-term care has never been inexpensive, and today’s costs could easily bankrupt most Americans. A nursing home costs anywhere from $13,000 to $17,000 a month and assisted living residences often cost the same. If you are paying $15,000 a month for your father’s care, that is $180,000 a year. With incidentals—diapers, medicines—the cost of his care could easily be $200,000 a year. Assuming that dad was fortunate enough to accumulate total assets of $600,000 during his life, he would be bankrupt in three years.
Because long-term care costs so much money, many people seek to qualify for Medicaid benefits. Medicaid is a federal and state-run program. It is the only government program that will pay for the costs of long-term care. But in order to qualify for Medicaid, an applicant must meet very stringent asset and income criteria.
Typically, the applicant can have no more than $2,000 in countable resources. If he is married, his spouse can retain certain non-countable resources, such as the house and one car. The assets of the applicant and his spouse are pooled, so it is irrelevant whether an asset is owned by the husband or the wife. The married couple is treated as one economic unit.
Income is treated differently than assets. Income belongs to the individual whose name is on the check. In other words, the husband’s Social Security income is his income. The wife’s social security income is her income. If he is applying for Medicaid benefits, her income does not impact his eligibility for benefits.
Once the husband qualifies for Medicaid, his needs will be met in the facility. Medicaid will pay for his nursing home care, which includes his room and board. The wife, on the other hand, is still living in the community, and if the Medicaid program did not make certain allowances for her, she would be impoverished.
To counter the potential of the community spouse being impoverished, the Medicaid program put in place certain anti-impoverishment provisions for her, and one of the key impoverishment programs just saw an increase in the figures the community spouse can retain.
As stated above, the community spouse can retain the house and a car. She can also retain a certain amount of the countable resources—a maximum of $157,920 and a minimum of $31,584. In practice, what this means is, if the couple has countable resources (stocks, bonds, annuities, IRAs, bank accounts, etc.) worth $315,840 (two times $157,920) or more, then the community spouse can keep the maximum amount of countable resources or $157,920. If the couple has less than two times the maximum of countable resources, then the community spouse can keep half the countable assets—so, if they have $200,000, she can keep $100,000 and if they have $100,000, she can keep $50,000. If they have less than $63,168 (two times $31,584), then she can keep the minimum, $31,584. So, if the couple had $50,000 in countable assets, she could keep $31,584.
The community spouse may also be able to retain some of her husband’s income, and this figure recently changed. She can now retain up to $2,644 of his income per month. The rules regarding how much income the community spouse can retain from her husband are even more complicated, but essentially, if her income is low and her shelter expenses are high, she would likely be able to retain $2,644 of his income, assuming he has that much income.
I have been practicing elder law for twenty-five years. I have helped thousands of people qualify for Medicaid benefits. Qualifying for Medicaid benefits is not easy. The rules surrounding the program are complex and frequently change. If you need to qualify for benefits, I would strongly recommend retaining the services of a certified elder law attorney.