Medicaid qualification can mean the difference between preserving your family assets and losing them all to a long-term care facility. According to population statistics, 70% of us will need long-term care at some point in time in our lifetime. If your mom and/or dad have to be in some type of protected environment, that usually means a nursing home. Simply put, there are no good nursing homes. And nursing homes are expensive! The cost of nursing home care usually averages anywhere from $8,000 to $10,000 per month per person.
Applying for Medicaid is a great way to protect your assets from the expensive nursing home costs, but there are specific eligibility requirements that must be met. Medicaid is a federal program administered by the state, and the qualifications are based on income and assets. Here we’ll share some of those income and asset limits, and discuss ways to transfer assets so they are not subject to being used to pay for nursing home costs.
The first eligibility requirement for Medicaid has to do with your income. If your loved one needs Medicaid to pay for nursing home care, their income can’t exceed around $2,300 per month. If their income does exceed that amount, they won’t qualify for Medicaid. But there are exceptions to that rule!
Medicaid Income Exception #1
If you have a spouse, we can shift some of that income from the person going into the nursing home to the spouse at home. Our job now is to take care and protect the spouse at home. Moving those assets to that person will not only protect them and provide income for them, but it will also help the other spouse qualify for Medicaid.
Medicaid Income Exception #2
We can place those extra funds into a qualifying income trust so that now that person will qualify for Medicaid. This is a perfectly legal way to move assets, and it works very well. We place the funds into a qualifying income trust, and once the money is in the qualifying income trust, then that money is paid to the nursing home.
The second major qualification factor for Medicaid is assets. If your loved one who is going into a nursing home has more than $2,000 in assets in his or her name, they don’t qualify for Medicaid. But again, we can shift assets between spouses such that the spouse who is going into the nursing home qualifies for Medicaid.
You may be thinking, wait a minute here! You’re telling me that you can do these transfers. What about that 60 month look-back rule for transferring assets? Fortunately for you, that 60 month look-back period doesn’t apply between spouses. So a husband and wife can transfer assets to one another as much as they’d like and that transfer rule doesn’t apply.
If the spouse that needs long-term care can only have $2,000 in assets, how much assets can the other spouse have — the spouse that’s not going into the nursing home? This year, a couple can have no more than $130,380 in assets. So if your spouse is going into a nursing home, they can have $2,000 in assets in their name and you can have $128,380 of assets in your name. As mentioned above, we can easily shift assets between spouses to meet these qualifications.
How Are Your Home and Retirement Accounts Considered for Medicaid Qualification?
What about your home? Does that count as an asset for Medicaid qualification? As long as your home equity doesn’t exceed $603,000, your home is exempt. In this case we would simply put the home singularly in the name of the spouse that didn’t need nursing home care. This will save the house from being sold at some point. to pay for the nursing home bill.
How does an IRA or a 401K affect Medicaid qualification? Here in Georgia, IRAs and 401Ks are not counted as an asset for Medicaid qualification. However, your required minimum distribution, what you’re required to take each month from those retirement accounts, is counted. But the asset itself is not counted.
In summary, Medicaid qualification counts everything you own except for your house (as long as it is valued less than $603,000), one car, a max of $10,000 of insurance to be used for burial expenses, and retirement accounts minus the required minimum distribution you’re taking. Everything else is considered when qualifying for Medicaid. That would include checking accounts, savings accounts, stocks, bonds, etc. A second vehicle can also be counted against you.
This is what we do. This is all we do. We help people qualify for Medicaid. Please share this information with your friends and family who might be needing to protect their assets from nursing home expenses. Just because someone is going into a nursing home, it doesn’t mean that it’s the end of the world as far as the family is concerned. We can help protect the independence, safety, and security of the spouse who doesn’t need nursing home care. We can do that by protecting those assets so that they’re not consumed by the nursing home.
We’re glad to help however we can. If you have any questions regarding qualifications as it relates to your specific assets, please send us an email at [email protected], complete this form, or feel free to call us at 229-226-8183.
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