Episode 74: Part 2 of Using Medicaid to Pay for Long Term Care

paying for nursing home with medicaid

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In this week’s episode, Devin and John continue the discussion from Episode 73: The Right Way To Qualify for Medicaid for Long-Term Care. Last week’s episode was about the basics of Medicare’s long-term care coverage and pre-planning, and this week’s episode is about crisis planning.

This week, John is explaining the steps you can take when someone needs long-term care right now. The strategies are very different for a single person or a married couple.

If the person needing long-term care is a single person, they can have a house, you can have a car, you can have your funeral paid for, you can have $2,000. How can you bring your assets down below the $2,000 limit? There are quite a few good options. The first and simplest thing you can do is to spend money on those non-countable assets. This might include doing work the home, purchasing a new car, or prepaying for funeral.

Generally speaking, you can’t give assets away. But there are exceptions! For example, you can transfer assets to a disabled child of any age, or you can also transfer assets to any disabled person under the age of 65. You can transfer a home to an adult child who has resided in the home for at least two years. There also may be specific transfers that are permitted on a state-by-state basis.

Now, if you’re part of a married couple, you have a different set of issues. Just like for single folks, there are a variety of ways you can transfer assets or income to become eligible for Medicaid long-term care coverage. Medicaid considered the joint assets of a married couple to qualify for Medicaid, but they only look at the income of the applicant. This can provide an opportunity to salvage some of these resources to provide the things that Medicaid won’t cover.

As you can see, this stuff is really complicated. You really need to be talking to someone who thoroughly understands Medicaid and long-term care insurance. If you’re in a crisis situation, find someone who knows what they are doing and find that person sooner rather than later.

Highlights:

  • How to use an annuity to offset the Medicaid transfer penalty period or assets that exceed the limits
    How the non-Medicaid beneficiary spouse can continue to accrue assets after the beneficiary spouse becomes Medicaid eligible
  • The worst place to get advice about Medicaid

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Every few weeks, Devin and John answer reader questions during the show.  Send your questions to questions@bigpictureretirement.net.