As much as we all would prefer not to think about, we all stand a chance of ending up in a nursing home as a senior. In fact, the longer you live, the more likely it becomes that you, or your spouse, will need long-term care (LTC). Given the high cost of LTC, it should not be surprising that over half of all seniors currently living in a long-term care facility depend on Medicaid to help them with the high cost of that care. You may have heard about how difficult it can be to qualify for Medicaid and planned ahead by including Medicaid planning in your overall estate plan. If so, you are well prepared for dealing with the Medicaid eligibility hurdles that often create problems for seniors in need of LTC; however, your estate may still be at risk after your death because of the Medicaid Estate Recovery Program (MERP). The Illinois Quad City Medicaid planning attorneys at Nash, Nash, Bean & Ford, LLP explain how MERP works so you know if your assets are at risk.
Qualifying for Medicaid as a Senior
For most seniors, the need for Medicaid eligibility stems from the prohibitive cost of LTC. Nationwide, you can expect to pay over $80,000 a year, on average, for LTC. The average for LTC in Illinois is consistent with the national average at just under $80,000 a year. Since neither Medicare nor most basic health insurance policies will pay for LTC, Medicaid is the only option for help covering LTC expenses for those who cannot pay out of pocket. Eligibility for Medicaid, however, depends on an applicant’s income and assets. To qualify, the value of your “countable resources” must fall below the program’s limit which is as low as $2,000 for an individual. If you had resources valued in excess of the limit when you originally applied, you likely had to “spend-down” your resources in order to qualify. Regardless of how you managed to get there, once you were found eligible, you probably thought any remaining assets were safe. The Medicaid Estate Recovery Program puts those assets at risk once again after your death.
What Is the Medicaid Estate Recovery Program?
The purpose of MERP is to allow the individual states to try and recover some of the funds they spend on Medicaid recipients after the recipient’s death. The MERP rules allow the state to file a claim against the recipient’s estate, for the amount spent on the recipient, during the probate of the estate. MERP only applies to anyone who started receiving benefits after March 1, 2005 for any of the following services and/or programs:
- Nursing facility care (nursing homes)
- Intermediate care facility for individuals with an intellectual disability or related condition (ICF/IID)
Are There Limits to What MERP Can Take?
Fortunately, there are some limits to MERP. MERP cannot go after your property if any of the following apply:
- There is a spouse who is still alive.
- There is a child under 21 years of age.
- There is a child of any age who is blind or permanently and totally disabled under Social Security requirements.
- In some cases a brother or sister
- If doing so would cause an heir or beneficiary to suffer an undue hardship
Each individual state determines what constitutes an “undue hardship.” In the State of Illinois, a claim will not be filed against your estate on the basis of undue hardship under the following circumstances:
“the heir or beneficiary must show that the recovery would cause them to become or remain eligible for programs such as Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF) or Food Stamps.”
Contact Moline Medicaid Planning Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have questions or concerns regarding the Medicaid Estate Recovery Program, contact the experienced Moline Medicaid planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.