According to the United States Department of Health and Human Services, seven out of every 10 seniors are going to need living assistance at some point in time. Long-term care is prohibitively expensive for a significant percentage of elders, and Medicare does not pay for custodial care.
Medicaid does pay for living assistance, and this is why it should be on your radar when you are preparing for the eventualities of aging.
Medicaid Asset Limit
Now that we have provided the necessary background information, we can look at the Medicaid asset limit. This program is only available to people who can prove that they have financial need, so there are income and asset limits. For an individual, the limit on countable assets in most states is just $2000.
That’s the bad news, but the good news is that there are some things that you own that are not considered to be countable. Your home is not a countable asset, but there is an equity limit. For the 2015 calendar year, the Medicaid home equity limit in the state of North Dakota is $552,000.
If there is a healthy spouse remaining in the home while his or her spouse is entering a long-term care facility, there is no equity limit at all.
Personal effects are not considered to be countable, and your household items would not be countable assets. One car that is used for transportation is not countable, and wedding rings, engagement rings, and heirloom jewelry are not counted by the Medicaid evaluators.
Unlimited term life insurance is allowed, and you could have a whole life insurance policy valued at up to $1500.
When it comes to assets that are countable, you could engage in a Medicaid spend down if you want to qualify for Medicaid to pay for long-term care. This would typically involve giving gifts to your loved ones before you apply for coverage. If you were to go this route, you would basically be giving your family members their inheritances in advance.
The alternative would be to use the assets to pay for nursing home care out-of-pocket until you exhaust your resources. You could then qualify for Medicaid to pay for the rest of your care.
Spending down takes careful planning, because you must complete your gift giving at least five years before you submit your application. If you do not, you will be forced to pay for your care out-of-pocket until you wait out a penalty period.
Medicaid Planning Report
We have prepared a special report that can provide you with some in-depth information about Medicaid planning. The report is free, and you can click this link to access your copy: Grand Forks ND Medicaid Planning.