Financial security is a concern for everyone. Seniors are no exception. All the money that you earned and saved over the course of a lifetime should be available to you as you age. Many wonder if they will be able to keep all of their assets when it comes time to move to a nursing home as all costs rise, and the cost of dementia care even more so. There are some things you need to know about your assets and nursing home care.
Will Medicare or Medicaid Pay for Nursing Home Care?
The original Medicare program does not cover a long-term stay at a nursing home facility. However, it will cover hospital care, doctor services, and medical supplies while you are there. If you have Part C, your plan may cover your stay in a nursing home may be covered if the facility has a contract with the health plan you are enrolled in.
Most nursing homes accept Medicaid payments. Eligibility for Medicaid programs is different in each state. Most eligibility requirements are based on your income and personal resources. The minimum income is typically based on the federal poverty level for the state you live in. In 2020, generally, single applicants over the age of 65 must have an income of less than $2,349 per month.
You can give yourself a preliminary review of Medicaid eligibility, but even if you don’t qualify for Medicaid when you enter a nursing home and need to pay out-of-pocket for care, your capital may become low enough that you qualify later.
Can you Gift Your Money to Someone Before Entering A Nursing Home?
If you think you can beat the system and give away all your assets right before you are admitted into a nursing home to qualify for Medicaid, you should know that any transfer of assets must occur at least five years, 2.5 years in California, before you apply.
If you are in violation of this Look-Back Period, you will be penalized with Medicaid ineligibility for a period of time. If the gifting is done prior to the 60 months from the date of your Medicaid application, then there will be no penalty. The penalty is calculated by dividing the amount transferred by the average price of nursing home care in the state you live in.
There are exceptions to this moratorium of gifting, including transfers to a non-applying spouse under the Community Spouse Resource Allowance. Additionally, you may be able to transfer your assets to one of your children. For instance, you may be able to gift your assets to your child under the age of 21 or your child who is permanently disabled or blind. If your adult child has been living in your home for at least two years and provided care to the applying person, you may be able to transfer your assets to him/her. Finally, if your sibling has an equity interest in your home and has been living there for at least one year before your Medicaid application, you can give him/her your assets without penalty.
What is Considered an Asset when Applying for Medicaid?
Assets that are considered when applying for Medicaid include your checking and saving balances as well as any CDs, bonds, or stocks you may own. If you own property in addition to your primary residence or more than one vehicle, these will also be considered assets.
Generally, most states allow a single Nursing Home Medicaid applicant over the age of 65 to retain $2,000 in assets in 2020. However, the exact figure might be different for the state you live in and you should contact your local Medicaid office for more information.
Additionally, you can keep your life insurance provided it has a face value of less than $1,500 and up to $1,500 set aside for burial arrangements. Your primary home, personal property, and one vehicle are not considered assets either. However, in most states, if your home’s equity value is more than $595,000, Medicaid will not pay for nursing home care. If someone else owns your primary residence jointly, your equity interest is only half of the home’s equity value.
Married couples who are both applying for nursing home Medicaid usually can have up to $4,000 in countable assets, but again, the exact amount varies by state. If only one spouse is applying, the applying spouse can transfer assets to the other spouse through the Community Spouse Resource Allowance. In this case, the applying spouse may keep $2,000 as assets while the non-applying spouse can have as much as $128,640 in 2020. If the non-applying spouse is living in the house, it is excluded completely from the asset limit.
What is the Medicaid Estate Recovery Program (MERP)?
While the Medicaid recipient is still living, selling the house often makes the person ineligible for Medicaid since the sale will create a large cash asset. However, you should also be aware that Medicaid has a plan to be reimbursed for your nursing home care after you die. The Medicaid Estate Recovery Program (MERP) allows Medicaid to put a lien on your home or other assets if they are part of your probate estate. A lien ensures that Medicaid is paid when the house is sold.
If the home is owned jointly, the government can still put a lien on the house after both parties die. As long as a spouse, minor child, disabled or blind child is still living in the house, a lien can not be placed on the home.
What are Filial Responsibility Laws?
If you believe that transferring your assets to your children will keep it from Medicaid’s clutches, more than half of the states in the U.S. have filial responsibility laws. Also known as filial support laws or filial piety laws, these state that in some instances, adult children of impoverished parents are legally bound to pay for nursing home debt. The enforcement of these laws varies from state to state. One way or another, Medicaid will have its due.
Keeping Money Before a Nursing Home Conclusion
In answer to the question of how much money can you keep going into a nursing home and still have Medicaid pay for your care, the answer is about $2,000. Gifting your assets to someone else may not protect it and may incur penalties when applying to Medicaid. Before transferring your funds, you should speak with a lawyer familiar with Medicaid laws.
Photo credit: Chuckcars Gift via photopin (license).
22 comments
My dad is in nursing home and all he has is a 07 truck which I am to get in his passing. He wants me to get it now. Can I do that?
Hi, Pam. I assume Medicaid covers your father’s nursing home costs? The answer is probably (because the truck probably isn’t worth too much), but it depends on the rules of your state. For an official answer, I would recommend calling your state’s Medicaid office. Find it by going through our state resources page: https://www.elderguru.com/resources/. If they have an eligibility office, that’s probably where you want to go. You want to find out what the “Medicaid look-back” period looks like. They may not speak to you specifically about your father’s case unless you’re on record as a power of attorney, but you should be able to speak to them generally. Don’t be surprised if the calls get frustrating trying to find a clear answer. It may take a few attempts to find the right person (it’s government after all). Another option is to try calling the Legal Services for the Elderly (or similar) in your state for an answer, which you should also be able to find on that same page. Good luck and let us know how it goes!
Hi. My sister does not qualify for Medicaid and receives close to $5,000 in monthly income. She had over $75,000 in liquid assets-several accounts. Will all her monthly income and assets be taken by a long term facility? She has recently been diagnosed with dementia
I’d love to answer your question, but there are too many variables. If you’d like, I can share your email address with someone who might be able to help.
My husband might have to go to a nursing home I own my home value is about 190.thousand dollars we own 2 vetches one is with 18 thousand couple thousand in bank I know I can stay in my home but I heard wen I pass the estate has to pay back the money Medicare payed nursing home
It’s possible some of the money from the house will have to go to repay Medicaid (not Medicare), yes.
I might have to take over care for my brother in the future .He is coming to live with me for now we are looking for an independent living that has an asst living also . will he have to lose all his money for this.
They are often allowed to keep some money while being eligible for Medicaid, but it is not much.
If you go into a nursing home on Medicaid are you allowed to keep any money in order to maintain your residence how do you pay your taxes and mortgage etc. if the nursing home takes all your monthly income
Usually not, but it’s very difficult to answer specific individuals’ situations. Are you going for skilled care or for long-term care? Do you have other liquid assets? There are too many variables.
I’m 76 an get 1733 a month social security,an retirement together can I stay in a nursing home for this amount
A true nursing home (i.e. not assisted living or congregate living) is going to cost more than that per month, but Medicaid – assuming you qualify for it – will kick in the difference.
Good evening, My Mom is in a nursing home and they recently began taking her income my question is whether or not Medicaid is required to allow my Mom money to pay her monthly bills or is she just up a creek? Thank you for your time.
There is usually an “allowance” of some time that she gets to keep, but it is often not much when you are in a nursing home. You’d want to check with your state’s Medicaid or long-term care office to know for sure.
if my husband goes into a nursing home will i lose his social security check , or i get some to go with mine to live?
Hi, Ruth. You need someone who can look at your full financial picture in order to answer that question. I would suggest contacting your state’s department of health or your area agency on aging. You can find the contact info at our state resources page.
I get my dead husbands retirement . will I lose that when I go into a nursing home
You will need to talk to someone who can look at your unique financial situation and what state you live in, but generally you will not “lose” the retirement, but it could be taken/used toward your cost of care at the nursing facility.
Will be planning to leave incompetent nursing facility and need Medicaid amount for obvious reasons. Have Medicare and Medicaid and own nothing. Plan to rent. Can you advise? ASAP. Thanks Jan
Hi, Jan. It’s hard to offer advice without knowing more information about your situation. I am assuming that you (or your loved one) need nursing facility level of care, no? What are you going to rent, an apartment? Medicaid won’t cover rent, of course, but it may cover in-home services.
My mother cosigns for 2 vehicle’s in her name and she do not drive, if we put her in a nursing home will those cars disqualify her for service when she receive Mediciad?
You’ll have to talk with your state office. Each state is different.