Get Specific Information Regarding Medicaid Regulations for Your State
Congress and the Federal Centers for Medicare and Medicaid Services (CMS) set out the main rules under which Medicaid operates. Each state, however, manages its own program and the regulations can differ from state to state.
The average cost of a nursing home in Michigan is $6,500 per month or almost $76,000 per year. Few couples can afford the cost of a nursing home for one of them without impoverishing the other.
Gather Information Regarding Every Asset that You Own
"Countable Assets" include all assets owned by the individual and his/her spouse other than exempt assets must be disclosed on the Asset Declaration and Medicaid Application.
Exempt assets include the homestead (to a maximum equity value of $500,000, a vehicle, prepaid funeral arrangements and life insurance with a face value of less than $1,500.
Calculate the Amounts that the Applicant and Spouse May Retain
In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in "countable" assets. The spouse of a nursing home resident--called the "community spouse," however, is permitted to retain up to one half of the couple's "assets up to $109,560 (in 2009) in "countable" assets or the first $21,912 even if that is more than half of the couple's assets. The figure is adjusted for inflation each year and is called the Community Spouse Resource Allowance ("CSRA").
Do Not Give Away Assets
Assets that have been "divested" or given away to anyone other than a spouse or disabled child will create a penalty period during which Medicaid will not pay for nursing home care for an individual who has otherwise qualified. Michigan Medicaid assesses a 1 month penalty period for each $6362 that was divested in the past five years. This penalty does not begin to run until the individual is in the nursing home and has qualified for Medicaid by having no more than $2,000 in assets.
Protections for the Community Spouse.
Congress has provided for special protections for the Community Spouse of a nursing home resident to avoid the spouse's impoverishment and to make sure that he or she has the minimum support needed to continue to live in the community. In addition to the Community Resource Allowance discussed above, the Community Spouse is permitted to keep all of his or her own income, which will be supplemented by the nursing home spouse's income if it is less than the then current Minimal Monthly Maintenance Needs Allowance. This amount is calculated according to a complicated formula and for 2009 ranges from a minimum of $1,750 to a maximum of $2,739 per month. Certain assets are able to be retained for the benefit of the Community Spouse and are not counted in qualifying an individual for Medicaid.
Rearranging Assets to Qualify as Non-Countable
Some excess assets, over the Medicaid Applicant's $2,000 and the Community Spouse Resource Allowance, can be recharacterized as non-countable assets. There are a number of strategies for doing this which depend on the couple's specific situation and income. These strategies include annuitization and irrevocable "solely for the benefit of" trusts and usually require the assistance of a knowledgeable elder law attorney.
Calculate the Patient Pay Amount
Generally, the entire income of a nursing home resident, minus certain deductions, is considered available for the resident's care and is subtracted from the amount that Medicaid will pay. Allowable deductions include payments for medical insurance, a $60 per month personal needs allowance and in the case of a married applicant, an allowance for the community spouse if he or she needs income support. A deduction may also be allowed for a dependent child living at home.
Seek the Advice of an Experienced Medicaid Planning or Elder Law Attorney
An attorney, well-versed in your state's Medicaid regulations can make sure that you meet the qualifications and preserve as much of your assets as possible. Small steps such as putting a house in trust can increase the amount of the Community Spouse Resource Allowance. With good planning, most of a couple's resources can be preserved.
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