Medicaid is relevant to senior citizens that will qualify for Medicare because Medicare does not cover long-term custodial care. This is the type of care that you would receive in a nursing home, and there are in-home caregivers that provide custodial care for seniors.
Of course, Medicaid is a need-based program. In Connecticut, you cannot qualify if you have more than $1,600 in countable assets in your name. Plus, income that is brought in by the institutionalized spouse must be contributed toward the cost of the care that is being received.
This brings up a question: what about the healthy spouse’s income? We will answer that question in this post, and will provide an overview of other relevant parameters.
Community Spouse Income
In Medicaid parlance, the healthy spouse that is living independently while their spouse is in a nursing home is called the “community spouse.” The rules for the community spouse’s income are very simple and straightforward. If you are earning income and your spouse is residing in a nursing home, you can keep your income. You are not expected to contribute anything toward the cost of the care that is being received.
Furthermore, if you are earning income but it is insufficient to satisfy your needs, you may qualify for a Monthly Maintenance Needs Allowance. This would give you the ability to keep all or some of your institutionalized spouse’s income up to a limit. In 2023, that limit is $3715.50, and the minimum allowance is Connecticut is $2288.75.
Community Spouse Resource Allowance
With regard to the asset limit of $1,600, it includes community property and separate property. However, the community spouse is entitled to a Community Spouse Resource Allowance. This is half of the assets that are countable, but there is a limit. This year, the limit is $148,620 in Connecticut. The minimum allowance is $29,724. This is the minimum that can be retained by the community spouse even if it is more than half the assets.
Non-Countable Assets
There are some assets that are not countable for Medicaid eligibility purposes. These would include a motor vehicle, wedding and engagement rings, heirloom jewelry, household goods, and personal belongings. An applicant can have unlimited term life insurance, $1,500 of whole life insurance, and $1,500 set aside for final expenses. In addition, prepaid burial plots are not counted.
Home Ownership
A home is not considered to be a countable asset, but there is an equity limit. In Connecticut, this limit is $1.033 million in 2023. That’s the good news, but Medicaid estate recovery is the bad news. When a Medicaid beneficiary passes away, the program is required to seek reimbursement from their probate estate.
If they were a homeowner at the time of their passing, Medicaid could put a lien on the property, but there are some exceptions to this rule. The house would be protected if a healthy spouse is still living at home, and it would be protected if there is a minor or a blind or disabled adult child in the residence.
Plus, there is a child caregiver exemption. To explain by way of example, let’s say that your daughter moved into your home to provide custodial care, and she has been doing this for more than two years. The level of care that she is providing is equivalent to what you would receive in a nursing home. Under those circumstances, you could give her the home, and it would not be subject to estate recovery.
Medicaid Trust
As elder law attorneys, we help people navigate this maze. You could convey assets into a Medicaid trust with future eligibility in mind. If there are income producing assets in the trust, you can continue to receive the income until and unless you apply for Medicaid.
Your home could be held by the trust as well. If you apply for Medicaid at least five years before you fund the trust, the assets that are owned by the trust would not count. Plus, the home would be protected, because you would not be the owner of the property.
Schedule a Consultation!
We are ready to provide the assistance you need if you would like to put a nursing home asset protection plan in place. You can schedule a consultation at our Westport or Glastonbury, CT estate planning offices if you call us at 860-548-1000, and you can use our contact form to send us a message.
Mr. McCann is licensed to practice before the courts of the State of Connecticut. He is a member of the American Academy of Estate Planning Attorneys.
Mr. McCann provides to his clients, trust and estate planning, and trust and estate administration services. Formerly, Mr. McCann was an adjunct professor of economics in the State of Connecticut Community College system, and a Commissioner of the Town of Simsbury Zoning Board of Appeals.