The cost of nursing home care is worrisome for those who are married when a spouse has to go to a nursing home. In the example above, Tom has had some major health issues in the past year and Louise is no longer able to care for him at home.
In this case, the couple lives in Texas where the average cost of nursing home care statewide is $63,017.25 a year ($172.65 per day). The state has a Medicaid program that is a joint state-federal program that will pay for nursing facility care, if a person meets both the medical and financial criteria.
Tom has met one of the major Medicaid threshold requirements because he meets the “medical necessity” criteria. This means that a doctor has certified that due to illness, injury or disability, Tom requires the level of care and services that can only be provided in a nursing home.
What will happen to their assets?
In 1988, Congress passed the Medicare Catastrophic Coverage Act, which created a process of allocating income and resources between a spouse who needs to live in an institutional setting and the spouse who can continue to remain in a community setting.
Tom and Louise’s resources are divided into two buckets: one that is exempt and the second that is non-exempt.
The family home, car, and household goods and personal effects are exempt or non-countable assets.
Almost everything else, whether they own it together or individually, is considered non-exempt. In Texas, IRAs are the exception if the owner of the IRA is over 70½ years old. However, that is not the same in every state.
Louise is entitled to keep one half of what they own, up to a maximum of $126,420, as of January 1, 2019. This is her “spousal protected resource allowance.” However, that allowance may be expanded above $126,420 when the couple’s combined income is below a certain threshold.
Anything else they own is used to pay for Tom’s nursing facility care or to purchase a very select group of “exempt” assets, like a replacement car or the cost of a prepaid burial.
If they have given money away in an attempt to preserve some of their assets within the last 5 years, a penalty is imposed, unless an exception applies. They would have needed to give away their resources at least five years preceding an application for Medicaid for there to be no transfer of assets penalty.
Louise needs income to live on so that she is not impoverished. She is entitled to a minimum monthly maintenance needs allowance of $3,160.50. These numbers are federally adjusted yearly and are based on inflation.
To determine how much of Tom’s income Louise can keep, Medicaid looks at Louise’s Social Security benefits, Tom’s Social Security benefits, any pension either of the two may have and any other income sources. She can keep her income. However, if the couple’s combined income is more than $3,160.50, Tom may have an applied income or co-payment to the nursing home.
Sounds scary? It is. This is why it is so important to do advance planning and have an ongoing working relationship with an attorney with experience in estate planning and elder law. There are changes over time to address the changing circumstances that life and aging presents. Even if you have an immediate need for long term care and don’t have the luxury of planning in advance, you should still consult with an attorney with experience in estate planning and elder law.
The Petrosewicz Law Firm can assist you with your elder law needs. Contact us today at (281) 344-9455 or [email protected].
Reference: Pittsburgh Post-Gazette (April 29, 2019) “Married and concerned about one of you going to a nursing home?”
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