Who Will Pay for Your Nursing Home Care?

Who Will Pay for Your Nursing Home Care?

“Health insurance coverage will often pay for the first few days or months at the nursing home, but that eventually stops.”

It’s hard for everyone in the family, when a beloved parent or grandparent must enter a nursing home, because they can no longer live on their own. Often the result of a physical or mental decline, the difficultly is compounded by worries about how to pay for the care, reports The Ledger in the article “The Law: Are you eligible for Medicaid nursing home coverage?”

Once health insurance coverage ends, the cost of care becomes enormous, with the monthly cost for a private-pay resident at nursing homes often exceeding $10,000 a month. According to Genworth, the average monthly cost for a semi-private room in Salem in 2018 was $9,399, and in Portland it was $9,125. Genworth offers statistics based on location, and you can search your region here: https://www.genworth.com/aging-and-you/finances/cost-of-care.html.

What usually happens? Residents can’t afford the care and only have two options: qualify for Medicaid Nursing Home coverage, or sell every asset they can, impoverish the spouse, and sometime even ask adult children or other family members for help. Most people contact an elder law attorney and explore becoming eligible for Medicaid Nursing Home coverage.

Let’s use the state of Oregon for an example of how to qualify for this coverage. A person must pass a three-part test that examines their assets, income and health, at the time the application is filed.

Income.

As of Jan. 1, 2019, you can have a maximum of $2,313 per month in income (before deductions) to be eligible for Medicaid Nursing Home coverage. If your income is above that number, then legal planning is necessary to create a qualified income trust. Timing is extremely important, because if the trust is not set up correctly or in a timely fashion, you will not qualify for Medicaid.

There is a common mistake made about a spouse’s income being too high. It’s happily not true: the income of a Medicaid applicant spouse will be analyzed, but the well spouse’s income can be unlimited, and it does not impact an applicant’s eligibility for benefits.

Assets.

As of Jan. 1, 2019, you may have a maximum of $2,000 of countable assets and be eligible for Medicaid Nursing Home coverage. If the assets are above that threshold, there are a number of acceptable legal options to help the individual become eligible. There are two types of asset classes to consider when applying for Medicaid Nursing Home coverage: countable and non-countable.

Some non-countable assets are as follows: In Oregon, homestead property up to $585,000 in value, one automobile, a prepaid burial contract and term life insurance with up to $1,500 cash value. Countable assets include other real property, bank accounts, investment accounts, life insurance with cash value above $1500, CDs and annuities.

As of Jan. 1, 2019, a spouse may have a maximum of $126,420 of countable assets, without having an impact on their spouses’ Medicaid eligibility.

An elder law attorney should be consulted to help the family understand the income and asset tests and create a strategy to help the individual qualify, if they anticipate needing Medicaid Nursing Home coverage. It’s best to do this well in advance, if possible.

Reference: The Ledger (Jan. 9, 2019) “The Law: Are you eligible for Medicaid nursing home coverage?”

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