Labor Day is a day to honor those who work hard all year for themselves and their families.  It can also be a time for seniors to reflect on what might happen to their retirement should there be a need for long-term care in a nursing home.

Medicaid is a medical assistance program funded by federal and state governments to pay for basic health care for persons who meet certain “categorical” requirements such as age (over 65) or disability.  Seniors in Connecticut who receive services as a patient in a skilled nursing facility, intermediate care facility or hospital for 30 days or more and are determined by Medicaid to need this care, may qualify for Medicaid benefits, if they meet the income and resources qualifications.

I am sometimes asked if it is ethically wrong to protect assets in order for a husband or wife to be eligible so that Medicaid will pay for long-term care in a nursing home.  Let me assure you that is both legal and ethical.  Here is why. 

You should protect your assets because the state does not want the community spouse (the one who is not in a nursing home) to become impoverished and require state aid. You have the legal right to keep a reasonable amount of your marital income and savings for your ongoing support

Exempt Assets.  Certain items that you own are not counted in determining your spouse’s eligibility for Medicaid.  Among these are your residence, one vehicle, and your household goods.

There are specific rules that protect the spouse at home if the other spouse is going into a nursing home.  These rules are called The Spousal Impoverishment rules which may make it unnecessary to “spend down” your savings (bank accounts, stocks, bonds, etc.).  The spouse at home is allowed to keep one-half of all savings owned by either member of the couple as of the date the institutionalized spouse entered a nursing facility up to a maximum of $137,400.  In some cases the community spouse can keep far more than $137,400.  In many cases, you can protect all of your assets. 

An experienced elder law attorney can analyze your case to determine what approach you should take to protect your assets for your ongoing support.  Any savings not needed for the at-home spouse’s support, can be used to pay off debts, including the mortgage on the residence.  Any other savings should be used for the disabled spouse’s care.     

For the nursing home spouse, a $1,600 resource limit applies.  This means your spouse in the nursing home can have this much money in savings and assets.

As stated above, certain resources do not count against the resource reserve limit.  Medicaid specifically excludes resources such as:

• The family home, as long as the individual intends to return home or as long as a spouse is living in the home;
• One motor vehicle, regardless of value;
• An irrevocable burial policy or funds set aside for burial up to $10,000 in value. The State of Connecticut also allows funds to be placed in a special burial space contract.

So, on this Labor Day, please consider the benefits of using an experienced elder law attorney to protect the assets you have labored long and hard to earn.  Don’t wait until a crisis arises.  Have a wonderful Labor Day weekend.