5 Essential Things You Must Know About Medicaid Planning for Families

Are you concerned about going broke in a nursing home?  If your parent or spouse is in a skilled nursing facility or will be soon, you should know about Medicaid Compliant Annuities.  According to the Pennsylvania Department of Human Services, the average cost of a skilled nursing facility is approaching $13,000 per month.Obviously, most families have trouble paying this bill.  For many, the only other payment source is Medicaid, which requires you to essentially go broke prior to eligibility. This is the fundamental problem with the way we provide care to our seniors.  Nursing homes provide a valuable service, but unfortunately the broken government rulebook requires you to spend the majority of your money before they will help pay.  What a shame making seniors go broke because of dementia or some other ailment.Fortunately for you, the state is bound by their own rules and those rules provide you with opportunities, if you know where to find them. This is where a Medicaid Compliant Annuity can help.  A Medicaid Compliant Annuity converts money that Medicaid has to count as an available resources into an income stream that a healthy spouse can keep.As an example, in a married case with Dad in a nursing home, Mom is only allowed to keep half of the available savings, subject to a maximum of about $154,000.  So, if the family has a total of $200,000 in countable savings, Mom will only be able to keep $100,000 and risks losing the other $100,000. Rather than losing $100,000, Mom may decide to work with a Certified Elder Law Attorney to explore her options.  One option she may have is to purchase a Medicaid Compliant Annuity. This annuity converts the extra $100,000 into an income stream which she is allowed to keep.  Mom gets to keep the money and Dads bill is paid by Medicaid!  This can be a great solution for you, if you have a sick family member. ***Please do not try this at home. Medicaid is complicated and only a qualified Elder Law Attorney can determine if this strategy is right for you*** 

To recognize your service as a Veteran, here is some education to highlight the benefits that veterans may get. Essentially there are two Veterans Administrations there is the Veterans Health Administration, and the Veterans Benefits Administration. The Veterans Benefits Administration The Veterans Benefits Administration deals with retiree pensions, service connected disability benefits and improved pension. You could expect to receive a financial reimbursement from the Veterans Benefits Administration. The idea behind the VA improved pension is based on wanting to prevent our wartime veterans from going broke after their services, due to long term care needs.The eligibility requirements for the improved pension is based on the different tiers of care offered. Theres a traditional improved pension and there is whats known as Housebound benefits. In addition there is the Aid and Attendance program catering for those with an increased need for care, when we want to keep people in their home with privately paid caregivers. With this level of care, there are often out of pocket medical expenses, but there is a program which compensates people on a monetary basis for these expenses. Veterans can get between $2,000 and $3,000 in reimbursements to help them.Improved Pension BenefitsThere is also a benefit for the widow of a veteran who has unreimbursed medical expenses which includes a personal care home. The Eligibility requirest the deceased spouse to have been a wartime veteran. He didnt need to serve in the war, but was required to have served 90 days of continuous active duty. One of those days had to have been during a period of war. The veteran would have also needed to be disabled within the VA definition of disability, requiring some form of care. To find out more about the improved pension and the Aid and Attendance program, there are veteran service organizations that will help you with these applications. The social workers at the VAs will point you in the right direction.The Veterans Health Administration The Veterans Health Administration provides access for veterans to receive healthcare in clinics and hospitals. Most veterans are eligible for some level of care and there are different eligibility criteria, depending on how long you served for, or if you were disabled. It is a complicated system and the information on the VA website is vague. I believe it is my duty to provide some helpful information for veterans who may need some form of long term care, either now or in the future.If you are eligible for VA health care coverage, you have to go to a VA and apply for benefits. This involves an analysis for your eligibility to receive healthcare. In addition to the clinics and hospitals, within the VA system there are VA nursing home beds, should you need long term care. There are also privately contracted nursing home beds in private nursing homes which the VA helps pay for. In addition, there are VA in-home health benefits to get a helper to provide care at home. Dont Rely Only On Federal VA BenefitsUnfortunately there are often waiting lists for veterans waiting for nursing home beds. As a result, many veterans end up in private nursing homes paying privately, just like everybody else. Sadly there are many veterans requiring long term care but it is not being provided through the VA because of limited resources. This is why I encourage Veterans to not rely solely on the federal VA for their health care.The state of Pennsylvania has a department of Military and Veterans Affairs, offering some good programs for veterans. There are six nursing homes within the state which service veterans in Allegheny County. It is called the Southwest Veterans Centre in Pittsburgh, and has both a memory care unit and skilled nursing facility. Some of the other centres in Erie County, Blair County, Lackawanna and Philadelphia offer personal care services. You would need to apply for eligibility, and prove your veteran status. I know that Pennsylvania residents are given priority, so Im not sure how many out of state people are served. Their website states that a resident at a veterans home must make monthly payments against maintenance fee liability in accordance with the residents ability to pay. However, this is vague, so if you are helping a veteran, or you are a veteran in need of some long term care, visit their website here. Theres an application online providing the information you need to apply for the long term care benefits.Why You Should Consider Medicaid BenefitsWhile Veterans should not rely solely on VA for their healthcare, I will add that Veterans shouldnt rely too much on Medicare either. This is because Medicare only pays for acute care, and not long term care. Often, veterans end up in civilian long term care settings and they need to apply for Medicaid benefits. It is therefore important to understand the Medicaid rules, if VA benefits dont provide the care that Veterans need. Medicaid is the other payment source for long term care, so being eligible for Medicaid benefits is important. Often, a senior is only eligible for Medicaid benefits when they are broke, after paying for long term care. However, we can avoid that by using an asset protection trust to protect your house and money.How We Can Help YouTo learn more, come to one of our upcoming free estate planning workshops. Register for one of our Three Secrets Workshops by calling us at 724-364-6615. Well teach you about Medicare, Medicaid, trusts, wills and what you need to do to set yourself up for success. See you there!

Each fall, the Centers for Medicare & Medicaid Services (CMS) renews the federal guidelines that seek to protect individuals whose spouses are applying for or receiving Medicaid long-term care benefits.These protections, known as the Spousal Impoverishment Standards, help to support the financial well-being of seniors who continue residing at home while their spouse on Medicaid lives in a long-term care facility, such as a nursing home.Qualifying for Medicaid Long-Term Care BenefitsLong-term care is prohibitively expensive for many, so a large share of adults aged 65 and older rely on Medicaid to help cover the costs.To qualify for Medicaid long-term care benefits, however, one must generally have very limited resources. In most states, the asset limit is set at $2,000. (Certain assets, such as personal belongings and the applicants primary residence, do not count toward this limit.) The applicants income typically goes to the nursing home as well, with some exceptions.So, what happens if a person who qualifies for Medicaid long-term care is married? How can their healthy spouse afford to remain on their own at home? This is where the Spousal Impoverishment guidelines help.2024 Spousal Impoverishment FiguresCommunity Spouse Resource Allowance (CSRA)A spouse who continues living at home while their partner receives long-term care coverage through Medicaid can keep up to $154,140 in assets starting in 2024.The healthy spouse, or so-called community spouse then has a minimum amount of assets to live on without rendering their Medicaid spouse ineligible for benefits. This special protection is known as the Community Spouse Resource Allowance (CSRA). The maximum CSRA generally rises each year; in 2023, it was $148,630.Meanwhile, according to federal law, no state can set the minimum CSRA below $30,828 as of 2024.Monthly Maintenance Needs Allowance (MMNA)In addition to CSRA, the federal government offers another level of protection for the community spouse: the Monthly Maintenance Needs Allowance (MMNA).The MMNA ensures that the healthy spouse who continues to live in the couples home maintains a certain amount of monthly income while their partner receives their Medicaid long-term care coverage. (Learn more about the ins and outs of MMNA.)In 2024, the maximum MMNA will be $3,853.50 (up from $3,715.50 in 2023). Again, this is the most in monthly income that the community spouse can keep while their spouse lives in a long-term care institution. If the healthy spouse does not make enough income to live on, this allowance comes from the income of the spouse on Medicaid.Note that the minimum MMNA for 2024 can vary depending on your state. Alaska and Hawaii typically have slightly higher minimums. The federal government updates the minimum MMNA each July.A Note on Income Cap StatesCertain states have in place a Medicaid income cap. If you reside in one of these income cap states, you will not qualify for Medicaid if your income equals more than $2,829 (in 2024) unless you have a certain type of trust in place. This trust, known to many as a Miller Trust, must hold any income you receive that is above that cap.As of 2023, the 23 income cap states were Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Iowa, Kentucky, Louisiana, Mississippi, Nevada, New Mexico, New Jersey, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, and Wyoming.Home Equity LimitsAs mentioned above, Medicaid does not consider the primary home of an applicant as a countable asset, unless the applicants equity interest in their home is above a certain amount.Your home equity equals your homes value minus the sum of any loans you owe on the home. In 2024, the home equity limit is set to $713,000. (Some states choose to raise this limit to $1,071,000.)Contact Entrusted Legacy Law at 412-347-1731 to schedule a complimentary 15-Minute call.