Guest blogger Sarah Schwartz, shares why we need sound advice to navigate today’s senior care waters.
Caring for an elderly parent can be one of life’s most difficult, though rewarding, challenges. When a loved one’s physical or mental health requires the often excruciating decision of having them placed in a nursing facility, many questions need to be answered. What is our best nursing home option? Should we opt for the facility closer to home, albeit with a minor down-side, to allow for more regular visits? Will dad or mom be given the active environment they were accustomed to? And on top of all that; is Medicaid paying for this, and if not, how can we afford the care dad requires and deserves?
Unfortunately, Medicaid has metamorphosed into a system of complex rules and regulations that, to the uninitiated, qualifying can be a daunting, sometimes full-time task. Fortunately, though, many professionals, such as an elder care attorney or senior Medicaid planning professional, can help guide one through the asset management and Medicaid eligibility procedure while keeping a significant portion of the applicant hard-earned life savings. Here are some of the basics:
This is the process of reducing your assets in order to be eligible for the Medicaid benefit. When applying for Medicaid, there are some allowable expenditures that will benefit an applicant in the future. Prepaying a funeral in an irrevocable trust or establishing a special need trust fund for a disabled child are some “Spend-down” strategies. Hiring a qualified Medicaid consultant, is also an allowable spend down and will smartly utilize your assets and kill two birds with one stone; spending down your “over-the-limit” money on receiving the expert guidance you seek, AND having Medicaid foot the exorbitant bill of the care itself.
Liquid Assets and Income
You may keep between $2000 and $4000 of your liquid assets while receiving Medicaid benefits. If your total monthly income exceeds $2163, then you get to keep $4000, and if you earn less than $2163, you get to keep $2000. Medicaid will only allow an applicant to keep a minimal monthly Personal Needs Allowance (PNA) of $35 while on Institutional Medicaid and $104 while on Global Options Medicaid (assisted Living Medicaid.) Additionally one may keep some income to cover a secondary insurance premium and in some situations a community spouse may keep the institutional spouse income. $2163, is also the income cap for Assisted Living Medicaid and for Nursing Home Medicaid in GA (as well as NJ as of this Nov.). Any additional income can be placed in a qualified trust fund to be used towards the care of the nursing home resident.
If you have a term life insurance policy with no cash value, or whole-life with a face value of less than $1500, it will be “exempt” assets for Medicaid eligibility. If it has a face value that exceeds $1500 the cash value on the policy will be a “countable asset” and will need to be factored into your total assets.
Although this may sound a bit overwhelming for those faced with the new reality of a loved one transitioning into long-term senior care, with the proper guidance and foresight, many pitfalls can be avoided.
Sarah Schwartz is the content manager at Senior Planning Services, an industry leader in guiding seniors and their families through the Medicaid maze.