One of the most important components of any comprehensive estate plan is a long-term care planning component. Planning for the likelihood that you (or a spouse) will need long-term care ensures that you can pay for that care when the time comes. If you are concerned about how your spouse will fare financially if you enter a LTC facility, a better understanding of the Medicaid spousal impoverishment rules may put your mind at ease. Toward that end, the Medicaid planning attorneys at Nash Bean Ford & Brown, LLP explain the Medicaid Minimum Monthly Maintenance Needs Allowance.
Will You Need Long-Term Care?
Like most people, you likely hope to grow old in your own home without ever needing to enter a long-term care facility. Statistically speaking, however, you stand more than a 50 percent chance of needing long-term care (LTC) at some point after you reach retirement age (age 65). Those odds continue to increase the longer you live. At age 85, you will stand a 75 percent chance of needing LTC before the end of your life. Because the chance of needing LTC is very real, it only makes sense to plan for the possibility that you will need to pay for LTC at some point in the future.
What Will LTC Cost You?
Healthcare costs in general are 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 2019, the average cost of a year in LTC nationwide was over $100,000. Illinois residents paid, on average, less than the national average at just over $80,000 for that same year. Nevertheless, with an average length of stay of about three years you could still be paying out over $250,000 for an average stay in LTC. Because neither Medicare nor most private health insurance policies will cover expenses related to LTC, many seniors faced with the need to pay for LTC turn to Medicaid for assistance.
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 drops 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 “Spousal Impoverishment” rules protect a community spouse.
Understanding the Minimum Monthly Maintenance Needs Allowance
In Illinois, the Medicaid asset limit is $2,000 for an individual applicant, and $3,000 for married couples applying together. While the low asset limit may not be a problem for the spouse going into LTC, it would leave the community spouse with virtually nothing. The good news is that if one spouse of a married couple does not require long-term care, they are subject to the Illinois Community Spouse Resource Allowance (CSRA). The community spouse can keep non-exempt resources owned by one or both spouses worth up to a maximum of $109,560.
In addition, the “Minimum Monthly Maintenance Needs Allowance,” or “MMMNA” allows the community spouse to keep part of the institutionalized spouse’s income if the community spouse has a low monthly income. The MMMNA is the minimum amount of monthly income to which a community spouse is entitled. The community spouse can keep part of the institutionalized spouse’s income if the community spouse has an income of less than $2,739 per month in Illinois (as of 2020). Both the CSRA and the MMMNA are adjusted annually.
Contact Henry County Medicaid Planning Attorneys
For additional information, please download our FREE estate planning worksheet. If you have additional questions or concerns about Medicaid planning, contact the experienced Medicaid planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.