Dear Attorney Tully: I am so upset and desperate. My husband, who has been healthy all his life, now needs to go into a nursing home. I was told that Medicare will not pay for the nursing home after a short amount of time. I thought we were protected, but now I think we will lose our home and life savings. HELP!
ANSWER: You will not lose your home. For married couples, it is an exempt (not non-countable) asset. There are a lot of legal and ethical plans that could protect what you and your husband have worked for over your lifetime.
When a loved one moves to a nursing home, family members are often shocked to learn that the bill is not paid by Medicare or health insurance. Few families have the money to pay the average nursing home bill of $204,000 per year. Life savings can be depleted quickly paying these bills. As life savings are depleted, gone, too, are many seniors’ dreams of leaving an inheritance to their children and grandchildren.
Why do so many seniors think that Medicare will pay their nursing home bill? It’s because Medicare, the health insurance that most seniors have, will pay for some coverage, but only up to 100 days, at the most. However, most seniors are notified that they are no longer eligible for Medicare after 21 days in the nursing home. That’s when seniors are on the hook to pay the $15,000 to $19,000 per month bill themselves.
What happens when a senior runs out of money? Medicaid, a joint federal and state-funded program, steps in. Medicaid is the government’s safety net to pay the nursing home bills of seniors. In most states, seniors who are not married must deplete all but $1,600 of their life savings to meet Medicaid’s asset qualifications. Married couples are allowed to keep a larger amount, (not counting their house and car). Most every asset above this amount must be sold in a process referred to as “spending down.” Please note that many cases, if you plan properly, you can keep all of your assets.
Is “spending down” – going through your life savings – inevitable? No! There are smart financial and legal strategies that allow seniors to shelter assets while still qualifying for Medicaid benefits. These strategies are often called Medicaid planning and every senior should have a working knowledge of how this type of planning may benefit them.
There is a lot of misinformation surrounding the Medicaid program and Medicaid planning. One of the most misunderstood aspects is the belief that once someone enters a nursing home, it is too late to do Medicaid planning. That’s simply not true. Whether someone is entering the nursing home tomorrow, already has been there one week, or has been a resident of the nursing home for five years, Medicaid planning to help save their nest egg is still possible.
As I have written many times, it is so important to hire an experienced elder law attorney that knows the ins and outs of Medicaid planning.