Parker, Pollard, Wilton, and Peaden - Attorneys at Law

How Do We Pay for Long-term Care? The Role of Public Assistance

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The words Medicare and Medicaid are frequently confused. Although both were created by the U.S. government in 1965, they are two very different public assistance programs.

Medicare guarantees access to health insurance for Americans aged 65 and older. Certain disabled people younger than age 65 can qualify for Medicare. Medicare pays for short-term skilled nursing care but does not cover long-term nursing home care.  So, for example, if you or a loved one is diagnosed with dementia, Alzheimer’s disease or suffers a stroke, Medicare won’t cover long-term care. Your options are to pay privately, obtain Medicaid, or apply for veteran’s benefits, if eligible.

Medicaid is a comprehensive medical program and offers benefits not normally covered by Medicare, such as nursing home care and personal care services. Since people are living longer and nursing home care is extremely costly, many nursing home residents – even those considered well off at some point in their lives – may run out of money and require the assistance of Medicaid. If a wartime veteran or a veteran’s surviving spouse is in need of daily aid and attendance, veteran’s benefits may be available to those who meet certain financial and medical criteria as established by the U.S. Department of Veterans Affairs. A single veteran can receive approximately $1,700 per month to help with assisted living care. The age of the applicant and other factors can affect allowable amounts for retained resources; generally, assets should not exceed $30,000-$80,000.

To obtain Medicaid, a single person must spend all but $2,000 in countable assets. For married applicants, a spouse may keep one-half of all countable assets, but is subject to a maximum of approximately $110,000. Generally, married persons are considered to have available all resources held by their spouses. However, Medicaid regulations were enacted to avoid spousal impoverishment and to permit certain transfers of assets; the rules govern the transfers of homes, joint bank accounts, life insurance and other resources. An elder law attorney can advise you on which assets are considered countable and which are protected.

A word of caution: Medicaid spend down and resource reduction is a complex process — one that imposes a five-year look back period for the transfer of assets —and if done improperly, can disqualify you for assistance and may also result in adverse tax consequences. Consult an elder law attorney for current government guidelines and for assistance with planning. I am available for counsel on these and other issues.