It is easy to burn out when you are responsible for providing full-time care to an aging or disabled loved one.
Several decades ago, Congress created safeguards to protect the savings of married couples using Medicaid. These protections prevent husbands and wives from bankrupting themselves and funding care for their loved ones. They originally required states to allow spouses of nursing home residents to maintain a certain amount of income and assets. In 2014, this protection was extended to married couples whether the care is provided in an institution or at home.
Spousal Impoverishment Laws in 2023
Medicaid eligibility is based on medical conditions, income, and resources. A spouse may require hospitalization, nursing home care, or the equivalent in-home care for assistance with daily living activities like bathing, dressing, and more.
The spouse requiring assistance must have an income of $2,742 monthly or less. However, if they exceed the limit, it’s still possible to qualify for benefits that will pay for long-term care.
The spouse in need of care must not have countable resources (money and personal property) valued over $2,000. However, the well spouse (community spouse) can keep up to $148,620 of their combined countable assets. If those assets exceed the limits, resources can be spent down to become eligible. This can be done in several ways:
- Use resources to pay for nursing home care
- Pay off debts
- Make home repairs and improvements
- Buy a new car or other personal property
- Prepay funeral and burial plans
- Pay for necessary non-medical equipment
- Purchase an annuity to provide income for the community spouse
Protecting Assets in an Irrevocable Trust
For many couples where one requires Medicaid benefits and the other remains at home, transferring assets to an irrevocable trust may be the best way to protect their home and savings while still qualifying for financial help with long-term care needs. But reorganizing assets must be done legally or it will result in penalties that delay coverage. If benefits are delayed, you will be responsible for out-of-pocket expenses until the benefits are approved.
The timeframe for delayed benefits is based on the value of the asset transfers made during Medicaid’s lookback period and the monthly cost of nursing home care in your state. An elder law attorney can review your situation and avoid mistakes that lead to these penalties with pre-planning for care. However, when there are immediate needs for long-term care, the goal is to qualify for benefits quickly, find out the best ways to pay for care until benefits begin, and reduce costs as much as possible.
Are You Caring for a Spouse at Home, or Is Your Spouse in a Skilled Nursing Facility?
When you’re caring for a loved one and serving as their support system, you shouldn’t have to worry about making ends meet, losing your home, or depleting a lifetime of savings. Spousal impoverishment protections help families stay together and get the care they need. Legal strategies can help you meet federal and state Medicaid eligibility requirements while protecting assets for a spouse and even preserving a legacy for your children.
Long-term Medicaid planning can help families avoid a medical or financial crisis. The sooner you start, the better. For immediate needs, time is of the essence. Either way, reach out to an elder law attorney today to discuss your options. You and your family will gain peace of mind knowing you’ve handled a potentially stressful and emotional situation.