“I didn’t know how stressful this would be.” This is a comment from a client of my firm who recently placed her Mom into a nursing home and is attempting to have Medicaid pay for the care. If you are in the process of applying for Medicaid benefits, you probably share this sentiment. A nursing home admission will result in tremendous financial stress for families. Nursing homes can cost more than $10,000 per month and you are often required to pay privately until you run out of money. The only other payment source is Medicaid, which has extremely complicated rules. Although there are exceptions, Medicaid generally allows a single person to keep up to $8,000 of available resources.
Additionally, a single person can keep an exempt home and car. Unfortunately, once the person passes away, the state has a claim against their estate and the family may lose the “exempt” house and car. In the situation of a married couple with one spouse in the nursing home, the healthy spouse is allowed to keep half of the available resources (up to $123,600), plus the healthy spouse’s retirement account, exempt house and car. All other assets and potentially some of the family’s monthly income must be spent on care. This can leave the healthy spouse destitute. When someone enters a nursing home, they must “spend down” their assets to the above limits to become eligible. Unfortunately, the process of spending down is confusing and full of pitfalls. Here are some mistakes to avoid: • Spending down on the wrong items • Applying at the wrong time • Failing to make exempt transfers • Misunderstanding the 5-year look back period • Failing to protect the healthy spouse • Working with nonlawyer “Medicaid Advisors” • Failing to avoid Estate Recovery • Failing to update Estate Planning Documents • Thinking it is too late to protect assets Finally, many families fail to take advantage of more complex planning options. The law allows for several strategies that can be used to protect assets, especially if there is a healthy spouse. You probably won’t learn these strategies from a caseworker, online or from a nursing home employee. To be sure you are making the right decisions, you should consult with a Certified Elder Law Attorney to understand how to become eligible for Medicaid without making mistakes. If you are paying privately for nursing home care, call our office at (724) 841-1393 to schedule a Complimentary Initial Consultation.
Editor’s Note: This article was written by Tim Sechler, Esq., a Certified Elder Law Attorney and Principal of Sechler Law Firm, LLC