By The Law Offices of David L. Orosz –
In our prior articles we have touched upon the possibility of using Medicaid benefits to help cover the costs of care if a patient requires Nursing Home or Assisted Living Facility care. Today we will discuss how the financial requirements of Medicaid can affect eligibility for those benefits.
At present, the only way that an applicant will be denied benefits because of income would be if that person’s monthly income clearly exceeded the local cost of nursing home care. The emergence and use of a document known as the Qualified Income Cap Trust has now solved this potential problem for everyone.
While there is ongoing scrutiny of the applicant’s monthly income, the at-home spouse is free to receive unlimited monthly income. And, if the at-home spouse’s should fall below certain published levels, he/she is entitled to retain an amount from the nursing home spouse’s income to maintain that published level.
In determining new worth, assets include: cash, the cash surrender values of whole life insurance policies, stocks, bonds, CDs, deferred annuities, pensions not in pay status, real estate, notes, accounts receivable, cash value of business, household good, automobiles, and boats. From the total of the above we would deduct liabilities and arrive at our net worth. However, Medicaid complicates asset counting by dividing assets into three different categories: Countable, Non-countable, and Inaccessible.
Countable (vulnerable) assets are things that Medicaid wants you to spend-down (give to the nursing home) before financial assistance is available to you. They include: cash, stocks, bonds, CDs, IRAs, Keoghs, deferred annuity, investment property, cash value from whole life insurance, vacation homes, second vehicles less than seven years old, boats, and every other asset not specifically listed as non-countable.
Non-countable (exempt or “protected”) assets are not in jeopardy when applying for Medicaid. These assets can be worth hundreds of thousands of dollars, but Medicaid has chosen not to count them in determining eligibility. Non-countable assets include: your residence, up to a value of $525,000, (includes mobile and manufactured homes) if an intent to return is expressed, cash value of whole life insurance if the total face value of all policies do not exceed $2,500, all term life policies, burial plots, prepaid “irrevocable” burial contracts of unlimited amount, additional burial fund up to $2,500, ordinary household goods and personal effects, wedding ring jewelry and cash or countable assets of $2,000 for the applicant and an additional $113,640 for any spouse.
Inaccessible assets are those assets that you are unable to liquidate (turn into cash within a reasonable period of time). They are not counted by Medicaid because at least at the time of application, they are not available to you in the form of cash. Examples of these assets are: real estate (other than residence) that is on the market for sale but not yet sold, joint ownership interest in any property (real or personal, mortgage notes receivable (balances), interests in family limited partnerships, commercial immediate annuities, percentage interest in income producing property, IRAs under regular periodic payments “RMD,” and any other such asset which is not readily convertible to cash but which can otherwise be offered for sale on the open market.
In next month’s issue, and after you have separated your assets into the above three categories, we will discuss what Medicaid would like you to do next! Can you say “spend-down!”
Law Offices of David L. Orosz
5237 Summerlin Commons Blvd.
Ft. Myers, FL 33907