There is a common misconception that once an individual enters a nursing home, no planning to protect assets can be done. There are several crisis planning techniques that can be utilized to save assets even after an individual has entered a nursing home. It is important to begin this process as soon as possible after admission to the nursing home in order to take full advantage of the laws in place for protecting the most assets, whether it be for the spouse at home or your children.
Medicare may provide some payments for a short term stay in a nursing home so long as the institutionalized individual (II) meets certain requirements. Generally, even if those requirements are met, Medicare will only pick up the full bill for the first 20 days. From days 21-100, there is a co-pay of $176.00 each day. Depending on the supplemental insurance, if any, this co-pay may be reduced or even eliminated. After day 100, Medicare will not pay anything toward the II’s stay in the nursing home. At this point, he would be deemed to need long term care. Medicare does not pay for long term care. At a monthly cost of $9,000-$12,000, it doesn’t take long for savings to dwindle. This leaves the family wondering how to pay for the care and how to make sure that the spouse at home has enough money to maintain his/her lifestyle.
Medicaid, also known as Medical Assistance, provides assistance for paying the costs of long term nursing home stays. It is available for both individuals and married couples. There are many requirements the II must meet before being deemed eligible for Medicaid benefits – including income and asset limitations. The Commonwealth only looks at the income of the II. If the gross income is less than $2,349/month, then he is permitted to retain $8,000 of countable assets. If the gross income is $2,349 or more/month, then he is permitted to retain $2,400 of countable assets. However, not all assets are “countable” assets. For instance, in most circumstances, the primary residence does not count as an asset.
There are also laws and regulations in place to protect the community spouse by ensuring that they have sufficient assets and income to maintain their lifestyle. If you and/or your spouse’s assets are over the limit, those extra resources must be “spend down”. However, that “spend-down” is not limited to paying the nursing home.
In addition, there is a five-year look back through all of your assets to see if any gifting was done for the purposes of obtaining Medicaid eligibility. If you have gifted in the past five years, the state tallies the total amount gifted during that time and imposes a penalty by taking the total amount gifted divided by the average daily rate for a nursing home in PA (as of 1/1/20 this rate is $352.86/day). There are ways to pay the nursing home during this penalty period.
Figuring out how to pay for long term care and gaining eligibility for government benefits are complex issues. A Certified Elder Law Attorney has the expertise to assess your particular situation and advise on the best options available to you and your family.
Our office is located in the heart of Bloomsburg, Pennsylvania. Call us today at 570-798-1084 to set up your initial consultation.