One of the greatest fears senior couples have is
that nursing home care for one of them will take all their
available money, leaving the husband or wife who is living at home
penniless. Until 1988 this was sometimes the case. Public welfare,
or worse, became the lot of some elderly spouses because their
husband or wife could no longer be cared for at home. In the last
20 years things have improved.
Paying for nursing home care can cost upwards of $10,000 a month in some
places. According to a recent study released by Genworth Financial Services, the
average cost of a semi-private bed in a nursing home is $183.25 per day, or
almost $66,900 a year, not including the cost of supplies and
medicines.
It's a rare elderly couple who can afford to pay
these rates for very long.
In 1988 Congress came to its
senses and enacted legislation to prevent what they call "spousal
impoverishment," which is government talk for sending the husband or wife at
home to the poorhouse.
Medicaid
Helps Couples Preserve Some of Their Assets
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Spousal impoverishment provisions come into
play when one of a couple enters a nursing home expecting to stay for at least
30 days. At that time the powers that be take a "snapshot," of their combined
resources.
All of their assets (cash in the bank, CDs, investments,
etc.) are combined on paper. Income, such as Social Security, retirement or
interest is another thing entirely, and is not included in these calculations.
Separate property doesn't count here, either...everything is combined, no matter
whether it's jointly owned or separate property. The home, household goods, one
car, and burial funds are backed out. The result is the couple's "combined
countable resources."
This number is then split in half. This is
the amount used to calculate the "Spousal Share."
To
calculate the spousal share, or the amount the spouse at home (the community
spouse) will be permitted to keep while the nursing home spouse receives
Medicaid help, the formula subtracts a "Protected Resource Amount" for the
at-home spouse from the spouse at home's half:
The Protected
Resource Amount is the largest of:
A. A maximum of $109,000 (in
2009); or
B. The individual state standard, which can be any amount
between $21,912 and $109,560 in 2009; or
C. An amount transferred
to the community spouse for her/his support as directed by a court order;
or
D. An amount designated by a state hearing officer to raise the
community spouse's protected resources up to the minimum monthly maintenance
needs standard.
After the protected resource amount is subtracted
from the community spouse's share of their combined countable resources, the
balance is considered to be available for the nursing home spouse's
care.
If the amount available to the nursing home spouse is less
than the state resource limit ($2,000 in most states) then the nursing home
spouse will immediately be eligible for Medicaid. If the amount is greater than
the limit, the nursing home spouse will have to "spend down" by paying privately
for care until that limit is reached.
This is extremely confusing, so
here are some examples:
John and Mary have $500,000 in countable
combined assets after backing out their non-countable things like the house, the
car, etc. John needs nursing home care:
| |
John |
|
Mary |
| |
|
|
|
| When assets are split, each has: |
$250,000 |
|
$250,000 |
| |
|
|
|
Mary can keep up to $109,560 as her
"Protected
Resource Amount" |
|
|
109,560 |
| |
|
|
|
| The remainder must be transferred from Mary to
John |
|
|
-140,440 |
| |
|
|
|
| John receives $140,440 from Mary |
+
140,440 |
|
|
| |
|
|
|
| John now has: |
$
340,440 |
|
|
| |
|
|
|
| John may keep $2,000 |
-
2,000 |
|
|
| |
|
|
|
| John must spend on his own care before he qualifies
for Medicaid |
$388,440 |
|
$109,560 |
However, John and Mary have consulted with an elder law attorney, who
has petitioned the court to raise Mary's protected resource amount. Mary relies
on investment income, and with her investments not producing what they once did,
she needs a greater amount invested to keep her standard of living. The state
hearing officer agrees, and Mary's protected resource amount is raised to
$200,000. She now must only transfer $50,000 to John. Depending on a couple's
circumstances the protected resource amount could be expanded even
more.
What about a couple with not so much money
available. Spitting that money in half could leave the spouse at home with next
to nothing.
Arnold and Jane have $30,000 in countable
assets. Jane will enter a nursing home, and Arnold will be remaining at
home.
| |
Jane |
|
Arnold |
| |
|
|
|
| When assets are split, each has: |
$15,000 |
|
$15,000 |
| |
|
|
|
Arnold's share is less than the
minimum protected
resource amount, so
Jane can transfer $6,912 to Arnold: |
-6,912 |
|
+6,912 |
| |
|
|
|
| |
$8,088 |
|
$21,912 |
| |
|
|
|
| Jane may keep $2,000 |
-2,000 |
|
|
| |
|
|
|
| Jane must spend on her own care before she qualifies
for Medicaid |
$6,088 |
|
|
Again, the amount Arnold may keep could be increased by a judge or a Medicaid
hearing officer.
As these examples show, it is not necessary
for the spouse staying at home to be completely impoverished due to paying for
nursing home care. However, it also illustrates that unless your seniors have
very little savings, it would pay to talk to an elder law attorney before you
take anything for granted regarding qualifying for Medicaid. Because the base
numbers can often be expanded, you don't want to simply assume that the most
your at-home senior can keep is $109,560. A good attorney will more than make
back any legal fees with the money he or she can save your stay-at-home parent
so he or she has the resources to continue living comfortably and securely.
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