At least 70% of all Americans who turn 65 in any given year will need long term care services and support at some point in time. For most people, the nursing home stay will be short term, less than a year. But a fourth of the people who go to a nursing home will stay a year or longer and ten percent of those will stay at least five or more years.
Many elderly persons who do not need a nursing home level of care nonetheless will still require some form of long term care, either in their homes with assistance or in an assisted living facility.
The cost of nursing home care is frightening. In Northern Virginia, it can average $6,000 to $9,000 per month. Hiring a home health caregiver is equally expensive. The average cost of a home health aide is $17 per hour; a licensed practical nurse is $37 per hour. A live in-home health aid is equally expensive, running $150 to $200 per day, or $4,500 to $6,000 per month. Assisted living usually is less expensive, but still can stretch a senior’s budget to the breaking point.
- Will Medicare pay for your nursing home care? – Medicare provides a limited amount of coverage to persons in a nursing home who need skilled nursing care. Usually, this is care for rehabilitative purposes, such as therapy following breaking a hip. Medicare does not pay for custodial care, which is frequently what persons staying long term in a nursing home require. Medicare pays less than 5% of the total cost of nursing home care in America.
- Is long term care insurance an option? – Long term care insurance policies are becoming more widely available. The benefit packages are getting better. Long term care insurance can be an important part of planning for long term care, for those who can afford it and are healthy enough to be insured.
- Will Medicaid pay for your nursing home care? – Medicaid is a public assistance (welfare) program intended to pay for medical care for the poor and medically needy. No one is entitled to Medicaid. Eligibility is means-tested. To be eligible for Medicaid, you need to meet residency and citizenship criteria, need a nursing home level of care and have income and resources below certain levels.
- Residency and Citizenship – To participate in the Virginia Medicaid program you need to be a resident of Virginia, residing in a nursing home or in your own home in Virginia. A citizen, naturalized citizen, or permanent legal resident of the United States meets the citizenship requirement for Medicaid eligibility.
- Countable Resources – The Medicaid applicant cannot have more than $2,000 in countable resources. Most everything an applicant owns will be a countable resource. Non-countable resources include the applicant’s home if the applicant or his spouse lives in it, one automobile of any value, a prepaid funeral plan or money set aside for the applicant’s funeral and burial, clothing and personal jewelry such as a wedding ring.
- Countable Income – The Medicaid applicant’s income must be less than the cost of his care. If the applicant’s income is less than 300% of the Supplemental Security Income level, currently $2,163 per month in 2014, he is deemed medically indigent and is income-eligible for Medicaid. If the applicant’s income is higher than this level, then his income will be compared to the cost of his care. If his income is less than the cost of his care, he will be income eligible. If his income is higher than the cost of his care, the applicant will not be financially eligible for Medicaid. For example, if the applicant has an income of $6,000 per month and his nursing home care costs $5,300 per month, the applicant will not qualify for Medicaid.
- The Home – In Virginia, it is presumed after six months that an unmarried Medicaid applicant residing in a nursing home is not going to be returning home. Their home is considered a countable resource. It will have to be listed for sale and sold. Medicaid eligibility can be retained while the house is being sold if the state prescribed rules on the pricing of the house are followed. If the Medicaid applicant is married, the house is not a countable resource as long as the spouse, who is known as the community spouse, resides in the home.
- Community Spouse Resource Allowance – If the Medicaid applicant is married, his community spouse will be allowed to keep half of their countable resources up to a maximum of $117,240 (in 2014). The minimum community spouse resource allowance is $23,448 (in 2014). So if half of the couple’s resources are less than $23,448, the community spouse will be allowed to keep the whole minimum allowance, even though it is more than half. The state does not care how family resources are titled. An asset titled to the community spouse, for example, an individual retirement account or a 401k plan, is a countable resource and is considered in determining the applicant’s eligibility for Medicaid.
- Community Spouse Income Allowance – In assessing income eligibility for Medicaid, the applicant’s income is determined without any deductions, even if the applicant is the main source of support for the husband and wife. If the community spouse’s income is less than $1,938.75 (in 2014) per month, she will be entitled to an allowance from her husband’s income to bring her income up to this minimum community spouse income allowance. This allowance can be increased up to $2,931 per month, depending on the cost of the community spouse’s housing.
- Personal Needs Allowance – Once an applicant is approved for Medicaid, all his income is paid to the nursing home, less a deduction for his Medicare/health insurance premiums and any allowance granted to his community spouse. In addition, the Medicaid recipient can keep $40 per month as his personal needs allowance. This allowance is supposed to pay for things Medicaid does not cover such as clothes, shoes or a newspaper subscription. There are many nuances to these general rules. At Hale Ball Carlson Baumgartner Murphy, PLC, our Virginia Medicaid Attorneys can help your family plan for future Medicaid eligibility and make wise choices if a Medicaid spend-down is needed.
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