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Medicaid Planning and Eligibility

For Senior Citizens, there is a high probability that one spouse may enter a nursing home. If your total asset value is up to $500,000 (including the house), Estate and Medicaid Planning is recommended.  There are two ways to pay for nursing homes or assisted living centers: Private pay (including long-term care insurance) or Medicaid monthly payments.  Medicare will not pay for Nursing Home or Assisted Living.  With Medicaid Planning, options are available for one spouse staying at home to preserve the assets accumulated during the marriage while the spouse entering a nursing home can receive Medicaid payments for nursing home or assisted living center.  There are some things that one should not do.

Exempt and Non-Exempt Assets: The individual's or married couple's assets are generally divided into exempt assets and non-exempt assets.  Among the exempt assets are home, personal belongings, one car, and other items within certain restrictions, which can be kept by the individual or couple.  Most other assets are usually listed as non-exempt assets. 

Non-Exempt Assets and Spend-Down:   For individuals and the "nursing-home" spouse, a maximum of $2,000 of non-exempt assets can be kept.  The "at-home" spouse is allowed to keep 1/2 of non-exempt assets to a maximum amount of $109,560.  There is a spend-down requirement to meet the statutory level before being eligible for Medicaid.  Attorney's fees are allowable under the spend-down.  With Medicaid Planning, assets can be transferred into exempt assets to produce income for the at-home spouse, not to be used for paying the monthly nursing home expenses. 

Income Allowed:  For married couples, the nursing-home spouse can have income up to $65 plus his/her health insurance premium per month.  The at-home spouse can keep income up to $1,822 per month or $2,739 (with shelter expenses) of the total income of both spouses.  

Gifts and Transfers to Anyone:  If the individual or couple made significant gifts or transferred assets to anyone (including children) or any organization within the past 5 years other than his/her spouse, there is a costly penalty resulting in potential ineligibility to receive Medicaid payments for months or years.

Estate Recovery:  In estate recovery, the state may have a claim or lien against the estate of the individual or the nursing-home spouse for all benefits paid.  For married couples, it is essential that the Medicaid Planning and Division of Assets be done properly and the maximum amount of assets be transferred to the at-home spouse within 90 days of placement in the nursing home.  Estate planning is important for the at-home spouse, so that assets will not pass back to the nursing-home spouse.  

Attorney Service:  Kansas Social and Rehabilitation Services (SRS) states that you are allowed to contact an attorney to help you with the necessary legal documents and decisions involved with the transfer or division of assets and other related matters.  Failure to transfer title in certain assets properly may result in the assets going back to the State.  Medicaid rules are difficult to follow and can result in delay of Medicaid eligibility.    

Medicaid Planning is important before giving gifts, transferring assets or filling an application for Medicaid; for any questions, contact Leonard or Blair.

***Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.