At some point during your retirement years, you may find that you need the type of care that can only be provided by a long-term care facility. Given the high cost of that care, you may need to turn to Medicaid for help paying your long-term care (LTC) bill. One concern many seniors have when considering Medicaid as an option is the impact applying for Medicaid will have on their spouse who plans to remain in the community. A better understanding of the Medicaid Community Spouse rules should put your mind at ease if you are worried about how qualifying for Medicaid will impact your spouse.
Will You Need Long-Term Care?
While there is no way to know with certainty who will need long-term care and who won’t, we do have statistics that can be used for planning purposes. Those statistics tell us that when we reach retirement age (65) we all have about a 50 percent chance of needing long-term care (LTC) at some point after that but prior to the end of life. Those odds continue to increase the longer you live. At age 85, you will stand a 75 percent chance of needing LTC before the end of your life. With those odds, it only makes sense to plan for the likelihood that you will need LTC.
Long-Term Care Costs
Healthcare costs, in general, are extremely high in the United States. It should come as no real surprise then to find that the cost of LTC is also high. For the year 2018, the average cost of a year in LTC nationwide was about $100,000. North Dakota residents, however, paid closer to $140,000 for that same year. With an average length of stay of three years, you are looking at a LTC bill of over $400,000. Because neither Medicare nor most private health insurance policies will cover expenses related to LTC, many seniors who need that type of care turn to Medicaid, which will pay for LTC.
Medicaid Eligibility Basics
To get help from Medicaid with your LTC expenses, you must first qualify for the program. The Medicaid eligibility guidelines impose both an income and a “countable resources” (assets) limit. Typically, a couples’ income and assets are combined for the purpose of determining Medicaid eligibility. If a couple’s assets exceeded the program limit, those assets must be “spent-down” (sold or transferred) until their value dropped below the limit. If the need to qualify springs from the fact that one spouse is in LTC, the spend-down requirement would clearly leave the other spouse (referred to as the “community spouse”) with no resources. Fortunately, the Medicaid program has special “Spousal Impoverishment” rules that are designed to prevent this type of result from occurring.
The Community Spouse
When one spouse needs long-term care, instead of combining the couples’ assets for the purpose of Medicaid eligibility, the Medicaid program allows for a “division of assets.” It works like this: All non-exempt assets belonging to either spouse are added together. One-half of the total, but not less than $24,720.00 nor more than $123,600 as of January 2018, is considered as the “spousal share” for the community spouse. The spousal share is protected from the Medicaid spend-down requirement, leaving them available for use by the community spouse. In addition, the “Minimum Monthly Maintenance Needs Allowance,” or “MMMNA” allows the community spouse to keep part of the institutionalized spouse’s income if the community spouse has a monthly income of less than $3,090. $3,090 is also the maximum amount of monthly income a community spouse can have. For example, imagine that you are applying for Medicaid and your spouse plans to remain in your home. Your spouse has an income of $2,500 per month. You would be able to give your spouse an additional $590 per month without incurring a penalty from Medicaid.
Contact a North Dakota Medicaid Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about the Community Spouse rules, or about Medicaid planning, contact a North Dakota Medicaid planning attorney at German Law by calling 701-738-0060 to schedule an appointment.