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LT Care Solutions
David Landwehr
New Medicaid LTC Income and Asset Rules
Wichita, KS November 30, 2006
I am an expert in Long Term Care (LTC) Planning, and LTC insurance. I work with the Wichita Independent Business Association WIBA, the Kansas Health Care Association KHCA, the Community Bankers Association and other associations as their long term care insurance specialist. My monthly LTC E-lert provides entertaining, timely, short articles on the subject of LTC planning – of interest to your baby boomer members and their parents.
My wife and I have experienced firsthand the stresses of long-term care. My mother-in-law lived with us for the last 4 ½ years of her life, enduring 29 surgical operations before she passed away. You are welcome to use the free LTC Elerts to educate your members. If you would like to investigate providing a discount for your members and their families or sponsor an Educational Seminar, please call 316-945-2011 or contact us at DLandwehr@LTCareSolutions.com www.LTCareSolutions.com educational website. *Designations held: CSA is Certified Senior Advisor, CLTC is Certified in Long Term Care.
New Medicaid LTC Income and Asset Rules
It has been said that no one plans to fail, but people fail to plan. Medicaid, a means-tested government program (welfare), is the biggest funding source for nursing home long term care in the United States. Most people who live in nursing homes have Medicaid paying for a portion of their care.
In order to qualify for Medicaid, an individual must meet both medical and financial guidelines. Medicaid is jointly funded by the federal government and by each state. The qualifications and benefits of the Medicaid program vary somewhat state to state. However, all states’ programs are closely tied to two important numbers that the Center for Medicare and Medicaid Services releases each year: the spousal resource allowance and the maintenance needs allowance.
Once a spouse needs long term nursing home care, he or she can keep $2,000 in countable assets (most assets are countable, with the major exception of most primary residences, and a few minor exceptions such as cars and burial plots). The spousal resource allowance is the amount of countable assets that the spouse who doesn’t need nursing home care can keep. As of January 2007, this amount is $101,640 ($99,540 in 2006). For married couples, when one needs Medicaid nursing home care, it doesn’t matter whose name is on any asset. This means that assets in excess of these limits are subject to what is called the “spend-down” process. Medicaid eligibility will not be possible (without a court order) if these limits are exceeded by assets. In Kansas, a lien on the home can now be placed at time of need not at death as before. Remember, it doesn’t matter which spouse’s name is on the asset.
The second important number released each year is the maximum monthly maintenance needs allowance (MMMNA). Spouses of nursing home residents are called ‘community spouses’ by Medicaid, since they are usually living in the community. Unlike countable assets, which are pooled by Medicaid no matter which spouse’s name they are in, income is looked at differently.
All of the income is the name of the nursing home spouse (the Medicaid recipient) is paid to the nursing home, with a minor amount held back for personal needs (usually $30 or less/month). If the community spouse needs some of this income to cover his or her living expenses, Medicaid allows the community spouse to keep what is called the minimum monthly maintenance needs allowance (MMMNA), without having to appeal or go to court. In 2007, the minimum needs allowance remains at the 2006 number of $1,650; the maximum is $2,541 ($2,488.50 in 2006). Whether a spouse receives the minimum of $1,650 or the maximum of $2,541, or somewhere in between, depends on the calculation of his or her needs, run based on the application.
Most people do not think about how they will pay for long term care, thinking that “Medicaid will pay for it.” It’s important that consumers understand the limitations and requirements of this government program. When they do, many will choose to buy long term care insurance during their working years. Privately funding care through insurance helps avoid the financial devastation that often accompanies the need for long term care, and preserves the choice of care like home care or assisted living apartments beyond just nursing homes.
Learn more...About LT Care Solutions
LT Care Solutions, Inc. specializes in LTC planning for both companies and individuals since 1992. We believe that dabbling is dangerous and LTC is an important decision best made in consultation with an experienced advisor.
Website: http://www.LTCareSolutions.com
LT Care Solutions
David Landwehr CSA, CLTC
President
email: dlandwehr@ltcaresolutions.com
phone: 316-945-2011
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Through funding of the Commonwealth Fund, Sunflower Foundation and the Kansas Department on Aging, Meadowlark Hills has worked with Action Pact, Inc. to create an integrated toolkit of materials and systems for use by long-term care providers (and others) with a stake in transforming the culture of long-term care in a sustainable fashion. The developers have generously given the toolkit to the Pioneer Network to distribute, with all proceeds going to further our unique mission as a non-profit organization dedicated to serving the culture change movement.