If a person is going to be in a nursing home (nh) or needs long term care help for half a year or more, maybe the rest of their lifetime, many will eventually apply for assistance. This is because of the long term care costs involved–on average close to $8100 per month in Michigan.
Medicare typically only covers such costs the first 20 days in full, the next 80 days afterwards with a co-pay, and typically bows out, or stops coverage, after day 100. (If the care level is hospice in nature, Medicare may jump back in with payments for the hospice service costs–but not the room and board portion of hospice.)
Medicare, which most folks 65 or older get, is not really “means tested.” This means that Medicare doesn’t really care about our assets or incomes and doesn’t typically care what our financial situation might be in a coverage analysis.
If it appears that the person is going to need a nursing home for months and months and months, or even years, they might apply for help with such bills via Medicaid, which doesn’t have a 100 day coverage limit. But Medicaid IS ‘means tested” and so a review of exempt versus non exempt assets is made, and sometimes, to qualify, one has to do some planning or spending down of non-exempt assets, or both.
Below are the “numbers” for 2018. Feel free to make an appointment with us if you need to look into Medicaid planning, or need help paying for long term care or preserving the nest egg of the spouse who doesn’t need long term care care.
Equity value of homestead (exempt) $572,000.00
Individual Resource Allowance (yearly) 2,000.00 (0r $3,000 if both spouses in nh)
Monthly Personal Needs Allowance 60.00
Minimum Protected Amount Community Spouse 24,720.00
Maximum ” ” ” ” 123,600.00
Burial Fund/Space Allowance (2 different things) 1,500.00 or more, depending on many factors
Pre-paid Funeral Contracts 12,540 (2017 number subject to adjustments)
Vehicle (one vehicle only) exempt (generally no value limit)
Minimum Monthly Allowance for Community Spouse 2,030.00
Maximum ” ” ” ” ” 3,090.00
There are more figures and numbers that can crop up when a medicaid application is being made–keep in mind DHHS essentially puts the assets into two piles–those assets which are exempt (and don’t count “against” an application, thus also amounts one can readily “protect) and assets which are not exempt. Non exempt assets would likely be used up, spent, on care BEFORE Medicaid could help. But this can really put those left behind at a disadvantage. Sometimes, with prudent planning or review, a couple or individual could shift these numbers a bit, to help preserve important savings or protections for the community spouse. Elder law attorneys help review these issues with the applicant/family. Naturally each situation differs and so what might be prudent or possible for one family, might not work, or may not be needed, for others. But a review is always smart.
DHHS also looks at the income of a Medicaid applicant. Typically, virtually all of the applicant’s income is used to help pay for the nursing home, with Medicaid helping pick up the balance, or shortfall. Thus, if a single person had monthly social security of 1300 dollars, and an 800 dollar pension from one spot and a 125 dollar pension from another spot they would turn over all but 60 dollars a month to the nursing home (this would be their patient pay amount under Medicaid rules), in this instance the single person would pay 2165 dollars every month towards their care–and Medicaid would help with the rest of the monthly bill.
When the nursing home patient (or prospective patient) has a spouse who can stay at home though, the patient pay amount might be adjusted so the community spouse–the one still home–can avoid what the law would call spousal impoverishment. The federal government and states who come together to provide Medicaid, realize that a spouse left behind might suffer if they can’t keep a bare bones budget going.
So in the example above, the nursing home spouse had 2225 of monthly income. What if their (community) spouse had income of 900 a month social security and one pension of 420 a month (as an example) for a total income of 1320 a month? Under the rules, at minimum, the community spouse could keep 2030 from their joint incomes. This means that the nursing home spouse would be able to give the community spouse at least 710 per month (to bring the community spouse up to 2030 in monthly income) and this also means that the “patient pay” amount in our example would change–and would drop to 1455 per month.
Anyway, this stuff can get confusing but as a basic numbers example for 2018, I wanted to get this posted. Most of the numbers above changed with the beginning of 2018, a few of the numbers change in the summer, so check with the Michigan Department of Health and Human Services or call an elder law attorney and make an appointment if you need to explore this more.