Post by norbert1 on Jun 23, 2006 9:51:58 GMT -5
<<< What is meant by "spending down the assets" to be approved for medicare? >>>
For you, medicaid would come into play when your husband would have to go into a nursing home. At time of admission into a nursing home, they take a snapshot of your finances and determine if "spend down" is required. They also look back 3 and 5 years for any asset transfers that would have hidden assets.
Exempt from the calculation is the house for the "community spouse" (you), one car, and prepaid funerals.
Included in the calculation is cash value of insurance policies.
Currently the calculation figures (when there is a community spouse) are $19,000 and $95,000. Using these figures, one half of assests must be spent on the nursing home care before medicaid will pay. Heres how it works -
Less than $38,000 - spend down to $19,000
between $38,000 and $190,000 - spend down half of assets
Over $190,000 - Spend down to $95,000
In some states, they use these limits more generously for the middle bracket- i.e. if assets are $120,000, spend down to $95,000
There are also rules on handling of income. The community spouse keeps income that is his/hers. A calculation is done to determine how much is needed to pay expenses. The community spouse may even be able to keep some of the nursing home spouse's income to meet this level.
For a single person needing to go into the nursing home -----
spend down is required to about $1500 and all income is used to pay the nursing home before medicaid pays the remainder. About $30 (now $50?) is allowed to be put into the person's personal account for personal items (beauty parlor, clothes, etc.)
An additional wrinkle is in states (such as Florida and New York) that are "income-cap" states.
Explanation (from http://www.elderlawanswers.com) - In some states, known as "income cap" states, eligibility for Medicaid benefits is barred if the nursing home resident's income exceeds $1,869 a month (for 2007), unless the excess above this amount is paid into a "(d)(4)(B)" or "Miller" trust. If you live in an income cap state and require more information on such trusts, consult an elder law specialist in your state.
Suggestions -
- Do not sell the house before getting advice on how this would affect the calculation. In general, you want to keep the house because it is not included in the calculation (when married and the spouse is remaining in the community, in the house).
- If medicaid is a possibility, talk to an elderlaw attorney now to plan for the best outcome when the time comes.
- You must have financial records to do the lookback. (In Connecticut, they are talking about changing the lookback to 6 years.) Look back for the nation has just been changed to 5 years. This will be phased in and start to have a effect three years from Feb, 2006.
A very good explanation of this is at elderlawanswers dot com On the left column, click on elderlaw information
*** Please note!!!!! ****
Medicaid rules changed in Feb 2006 (I have heard that these changes are in suspension while challenged in court. I have not verified this)
- The look-back is now 5 years.
- Any transfers in the five year period are bundled together and used to determine the length of time medicaid WILL NOT PAY for a nursing home beginning on the day the money is depeted.
- Medicaid will not pay if equity in the house is greater than $500,000 (or $750,000 in certain states.) This is to encourage use of reverse mortgages first to pay for the NH.
- and eventual asset recovery when the community spouse dies is becoming more widely practiced (under pressure by the federal government) They are also putting medicare liens on the house of the community spouse.
Norbert
For you, medicaid would come into play when your husband would have to go into a nursing home. At time of admission into a nursing home, they take a snapshot of your finances and determine if "spend down" is required. They also look back 3 and 5 years for any asset transfers that would have hidden assets.
Exempt from the calculation is the house for the "community spouse" (you), one car, and prepaid funerals.
Included in the calculation is cash value of insurance policies.
Currently the calculation figures (when there is a community spouse) are $19,000 and $95,000. Using these figures, one half of assests must be spent on the nursing home care before medicaid will pay. Heres how it works -
Less than $38,000 - spend down to $19,000
between $38,000 and $190,000 - spend down half of assets
Over $190,000 - Spend down to $95,000
In some states, they use these limits more generously for the middle bracket- i.e. if assets are $120,000, spend down to $95,000
There are also rules on handling of income. The community spouse keeps income that is his/hers. A calculation is done to determine how much is needed to pay expenses. The community spouse may even be able to keep some of the nursing home spouse's income to meet this level.
For a single person needing to go into the nursing home -----
spend down is required to about $1500 and all income is used to pay the nursing home before medicaid pays the remainder. About $30 (now $50?) is allowed to be put into the person's personal account for personal items (beauty parlor, clothes, etc.)
An additional wrinkle is in states (such as Florida and New York) that are "income-cap" states.
Explanation (from http://www.elderlawanswers.com) - In some states, known as "income cap" states, eligibility for Medicaid benefits is barred if the nursing home resident's income exceeds $1,869 a month (for 2007), unless the excess above this amount is paid into a "(d)(4)(B)" or "Miller" trust. If you live in an income cap state and require more information on such trusts, consult an elder law specialist in your state.
Suggestions -
- Do not sell the house before getting advice on how this would affect the calculation. In general, you want to keep the house because it is not included in the calculation (when married and the spouse is remaining in the community, in the house).
- If medicaid is a possibility, talk to an elderlaw attorney now to plan for the best outcome when the time comes.
- You must have financial records to do the lookback. (In Connecticut, they are talking about changing the lookback to 6 years.) Look back for the nation has just been changed to 5 years. This will be phased in and start to have a effect three years from Feb, 2006.
A very good explanation of this is at elderlawanswers dot com On the left column, click on elderlaw information
*** Please note!!!!! ****
Medicaid rules changed in Feb 2006 (I have heard that these changes are in suspension while challenged in court. I have not verified this)
- The look-back is now 5 years.
- Any transfers in the five year period are bundled together and used to determine the length of time medicaid WILL NOT PAY for a nursing home beginning on the day the money is depeted.
- Medicaid will not pay if equity in the house is greater than $500,000 (or $750,000 in certain states.) This is to encourage use of reverse mortgages first to pay for the NH.
- and eventual asset recovery when the community spouse dies is becoming more widely practiced (under pressure by the federal government) They are also putting medicare liens on the house of the community spouse.
Norbert
