The average American can now expect to live almost twice as long as his/her ancestor did just a century ago. Living longer, however, also comes with an increase in the likelihood of needing long-term care (LTC). If you do end up needing LTC, the high cost of that care also means you may end up turning to Medicaid for help covering your LTC expenses. To qualify for Medicaid though, you cannot exceed the program’s (very low) income and asset limits. Where does that leave your spouse, however, if you are married? Must your spouse also meet the program income and asset limits? The attorneys at Nash, Nash, Bean & Ford, LLP explain the Medicaid community spouse rules.
Long-Term Care Costs
Healthcare costs, in general, are extremely high in the United States. It should come as no real surprise then to find that the cost of LTC is also high. For the year 2017, the average cost of a year in LTC nationwide was over $80,000. Illinois has historically kept pace with the nation in terms of the cost of LTC, with an average yearly cost of about $75,000 for the same year. With an average length of stay of 2.5 years, you are looking at an LTC bill of over $200,000. Because neither Medicare nor most private health insurance policies will cover expenses related to LTC, many seniors who need that type of care turn to Medicaid, which will pay for LTC.
Medicaid Eligibility Basics
To get help from Medicaid with your LTC expenses, you must first qualify for the program. The Medicaid eligibility guidelines impose both an income and a “countable resources” (assets) limit. Typically, a couples’ income and assets are combined for the purpose of determining Medicaid eligibility. If a couple’s assets exceeded the program limit, those assets must be “spent-down” (sold or transferred) until their value dropped below the limit. If the need to qualify springs from the fact that one spouse is in LTC, the spend-down requirement would clearly leave the other spouse (referred to as the “community spouse”) with no resources. Fortunately, the Medicaid program has special “Spousal Impoverishment” rules that are designed to prevent this type of result from occurring.
The Spousal Impoverishment Rules
.Medicaid established what is known as the “Minimum Monthly Maintenance Needs Allowance (MMMNA)” each year. The amount of the MMMNA is set by law and will vary each year depending on factors such as geographic area and household size. In 2014, the Prevention of Spousal Impoverishment Standards for the State of Illinois were set at the following, subject to increase each year with the cost of living:
- The Community Spouse Asset Allowance Standard: $109,560
- The Community Spouse Maintenance Needs Allowance Standard: $2,739
What this means if your spouse is in need of LTC is that your spouse could qualify for assistance from Medicaid (assuming all other Medicaid eligibility guidelines are met) and you would be able to keep assets valued at the current Community Spouse Asset Allowance Standard and be entitled to income equal to the current Community Spouse Maintenance Needs Allowance Standard. If your own monthly income is less than the current allowance, you will also be entitled to retain some of your spouse’s income each month without your spouse losing his/her Medicaid eligibility.
Contact Medicaid Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have questions or concerns regarding the Medicaid Community Spouse rules, contact the experienced attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.