If you are contemplating the need for long-term care for yourself, or for an elderly loved one, in the future you may be worried about how to pay for that care when the time comes. If so, you are certainly not alone. The high cost of long-term care (LTC) is a concern for the vast majority of seniors in the United States. One avenue you may pursue for assistance with LTC expenses is qualifying for Medicaid benefits. Medicaid will help cover your LTC costs if you are eligible. One area of Medicaid eligibility that causes a considerable amount of confusion is the Medicaid “spend-down” rule. To help clear up some of that confusion, the Vero Beach Medicaid attorneys at Kulas Law Group explain the spend-down rules.
Long-Term Care Costs
Although no one wants to end up in LTC, the reality is that every year your odds of needing LTC increase. With that in mind, it is wise to plan for the possibility of needing LTC to ensure that you can afford the high cost of that care when the times comes. Nationwide, the average cost of a year in LTC for 2017 was over $80,000. In the State of Florida, the average cost for 2017 was just over $100,000 for a year in LTC. What makes the high cost of LTC even more problematic is that neither Medicare nor most basic health insurance plans will cover LTC expenses. Unless you can afford to cover the costs out of pocket or you purchased a separate LTC insurance policy, that leaves Medicaid as the only option for assistance paying your LTC bill.
Medicaid Eligibility for Long-Term Care
Medicaid is a healthcare program that is primarily funded by the federal government but is administered by the individual states. As such, you will find differences among the states with regard to eligibility requirements and benefits offered to participants in the program. All states, however, utilize income and asset limits when determining eligibility. This is where it can become very confusing for an applicant trying to get help paying for LTC. Each individual state also determines what categories of Medicaid to offer. If you are a Florida resident, for example, you would apply for the Medicaid for Aged and Disabled (MEDS-AD) as a senior which provides you with full Medicaid coverage if you qualify. If nursing facility care is required, however, you would also need to meet the additional eligibility requirements for the Institutional Care Program, or ICP.
Because there are so many factors that go into determining eligibility for Medicaid, particularly LTC Medicaid, it is always best to consult with an experienced Medicaid attorney regarding your unique set of circumstances to determine your eligibility. In general though, a single applicant’s monthly income (wages, Social Security benefits, pensions, veteran’s benefits, annuities, SSI payments, IRAs, etc.) must be no higher than 300% the Federal Benefit Level, also referred to as the Federal Poverty Level (FPL), to become eligible for Medicaid. For 2018, the FPL is $750 for an individual. Assets are also considered when determining eligibility. A single applicant may not have more than $2,000 in non-exempt assets. All assets fall into the exempt or non-exempt category for the purpose of determining Medicaid eligibility. Examples of exempt assets include a home (up to an equity limit), one automobile (no equity limit), household furnishing, and an irrevocable burial trust (no limit).
The rules for a married applicant are a bit more complicated because of the Spousal Impoverishment rules that attempt to ensure a community spouse (the spouse still living at home) is not left without sufficient income and resources.
How Does “Spend Down” Work?
If you apply for Medicaid to help cover your LTC costs, but your non-exempt assets exceed the limit, one option is to “spend-down” those assets. In essence, the idea is to get the value of those assets down below the program asset limit. Sometimes, you can spend-down your non-exempt assets by turning them into exempt assets. For instance, you might pay down your mortgage, purchase a vehicle if you don’t already have one, or make improvements to your home. What you want to avoid is ending up in a situation where you are required to spend-down your excess assets by paying for your own LTC expenses. This is why Medicaid planning is such an important component of any comprehensive estate plan. Including Medicaid planning in your overall plan several years before you need to qualify for Medicaid is ideal because it allows you to avoid any negative ramifications of the five year look-back rule; however, even last minute Medicaid planning strategies may be able to help you avoid the loss of assets as a result of the need to qualify for Medicaid.
Contact Vero Beach Medicaid Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the spend down rule or Medicaid eligibility in general, contact the experienced Vero Beach Medicaid attorneys at Kulas Law Group by calling (772) 398-0720 to schedule an appointment.