In this article, you will learn…
- What Medicaid planning is,
- The asset limits to qualify for Medicaid, and
- How you can qualify for Medicaid when you’re over the asset limit.
What Is Medicaid Planning?
Medicaid planning is simply planning for the possibility of you needing long term care. In the event that you need long term care and you don’t have any kind of long-term care insurance, Medicaid could potentially cover the cost so that you don’t have to pay out of pocket. In order to qualify for Medicaid, however, you need to be sufficiently poor.
If you don’t meet that threshold to qualify for Medicaid and you don’t want to spend down all of your money in order to meet it, you could alternatively place your assets in a trust where they’re no longer considered as countable for Medicaid purposes.
A lot of people don’t want the nursing home to be able to come after their assets, which is another way of saying that they want the government to pay for their nursing home care instead of the expense coming out of their own estate. The way to do that is through Medicaid.
Medicaid planning is essentially trying to qualify for Medicaid when you might not qualify outright due to your assets. For Medicaid to cover the cost of your long term care of a single individual, you have to have less than $2,000 in assets. If you’re a married couple and both spouses are going into care, that asset limit is $3,000. If you’re a married couple and only one spouse is going into long term care, you can have up to half of your assets up to $137,400.
If you’re someone who has $500,000 or more in assets, you don’t want to have to spend down your assets in order to qualify for Medicaid. That’s where Medicaid planning could come into play and you could transfer assets to a trust so that they’re no longer countable. It gives the appearance that you’re under the threshold while your assets are preserved for your children or for whatever you choose later on.
What Happens Without Proper Medicaid Planning?
When there isn’t proper Medicaid planning at the time you go into long term care, you will need to pay your assets down to qualify.
If you don’t have any assets, you will obviously qualify for Medicaid. If you have tons of assets, you could afford to pay for your care out of pocket. Medicaid planning is most beneficial – and even essential – for those who fall somewhere in the middle.
Does Medicaid Have An Income And Assets Limit?
Medicaid does have an income and assets limit. The income limit isn’t typically something that becomes much of a concern for individuals. The income limit for Medicaid is 300% of social security income. If you end up over that limit, you pay the amount by which you’re over the limit much like a deductible.
As an example, if your income limit is $1,000 per month and your income is $2,000 per month, you wouldn’t be disqualified from Medicaid. Instead, you would pay $1,000 per month toward the long term care and keep the remainder of your income. So, income doesn’t become a disqualifying factor.
The most common reason people don’t qualify for Medicaid is their asset limit, which is…
- $2,000 for an individual,
- $3,000 for a couple where both spouses are in long term care, and
- Half of your assets up to $137,400 for couples where only one spouse is in long term care.
Assets that aren’t countable toward the Medicaid asset limit are…
- Prepaid burial arrangements,
- Prepaid funeral arrangements,
- Primary residence,
- Primary vehicle,
- Tangible belongings, and
- Assets protected in trust.
With your primary residence, however, it’s important to know that when you qualify for Medicaid, they will put a lien on your house. If you and your spouse both die, they’ll demand that the estate paper lien accrue at the rate that they’re paying every month. This is usually around $9,500/month. If you’re in long term care being covered by Medicaid for 10 months, before your beneficiaries can have your house, they would have to pay the state back $95,000.
For more information on Medicaid Planning In Massachusetts, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (508) 233-2305 today.
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