Nursing Home Care Costs and Applying for Medicaid

Medicaid provides several programs funded through a state-federal agreement, explains the article “Planning a must: Medicaid and paying for nursing homes” from The Dallas Morning News. One of the programs provides long-term nursing home care benefits to pay for nursing home or approved residential care facilities. However, requirements to qualify for Medicaid vary widely from state to state. It’s best to speak with an elder law attorney, who will be able to help you plan in advance.

To qualify in Massachusetts, you must have a medical need and fall under the asset limits, which change yearly. In 2020, the asset (resource) amount for an individual is $2, 000. For a married person, your spouse can have countable assets of $128, 640. If these sound like low levels, they are. However, there are some assets that Massachusetts does not count. A married couple or individual’s house is exempt up to an equity limit of $893, 000. However, once sold, an exempt assets becomes a countable asset, that is, cash. An elder law attorney can assist with the planning relating to a primary residence. In Massachusetts, there is one other exempt asset, which is one vehicle. All other assets are generally countable and subject to the asset cap above. One way to get countable assets down to or under the cap is to spend these “excess resources” on exempt purchases. The strategies available to an individual depends upon the mixture of assets that he or she has and his or her marital status. There are many variables that go into proper planning.

For most people, their assets are too high to qualify for Medicaid (which is called MassHealth in Massachusetts), but their assets are not sufficient to pay for nursing home care, which statistically is a stay of 36 months. The average cost of skilled care in a nursing home in the Greater Norwood area is about $15, 000 per month or $180, 000 per year. It is not uncommon to see the cost close to $16, 000 or even higher per month. That’s where Medicaid planning with an elder law attorney comes in. The attorney will know what assets are countable and what are exempt. More importantly, the elder law attorney will know how to protect those assets in accordance with the Medicaid requirements and regulations.

While it may be tempting to give away assets, there is a five-year lookback period. And, a DIY long term care plan can unintentionally result in ineligibility, given the time frame for the need for skilled care. The rules about gifting assets are complicated and mistakes are non-negotiable. The result may be a delay in eligibility.

If you are planning for someone else, such as an elderly parent, be sure that they have a durable power of attorney and a health care proxy and the agent under those documents is the person assisting the elder. Why are these documents so important? If you or your loved one becomes incapacitated while you are either planning for long term care or applying for MassHealth benefits, your agent will be able to legally assist with the Medicaid planning and file the Medicaid application. Without these essential documents, the incapacitated individual will need to have a conservator and/or guardian appointed by the courts.

An elder lawyer will be able to help you and your family with planning for Medicaid, and with an application. You’ll be better off relying on the help of an experienced attorney.

Reference: The Dallas Morning News (March 15, 2020) “Planning a must: Medicaid and paying for nursing homes”