Archive for March, 2010

Family Dynamics

Family Dynamics

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How to Pay for Long Term Health Care

How to Pay for Long Term Health Care

To understand the 5 Secrets to Obtaining Medicaid Benefits in New York State, you must first understand the answer to the question…. Why would I ever need Medicaid?

There are only 3 ways to pay for Long Term Health Care.

  1. Private pay: Reach into your pocket every month and pull out the $12,000 plus nursing home fee.  If you are fortunate enough to afford such a luxury, you probably do not need to think about Medicaid planning.
  2. Long Term Health Care Insurance: You can privately insure yourself against having to pay the full cost of nursing home fees.

However, the premiums for such policies tend to be significant and you must be in good health, in other words, insurable.  Long Term Health Insurance is an excellent option for the small amount of you who fall into this category.

  1. Medicaid: Medicaid is a Federal program that will pay for most of your Long Term Health Care needs.  Medicaid is the single largest payer of Long Term Health Care in the country.

Chances are, Medicaid is the right choice for you.  However, you need to know the rules of Medicaid to successfully have them pay for your Long Term Health Care needs.  Those rules can be maddening to understand, so we thought it would be an excellent idea to try and simplify them for you.  Look for my Next Blog “The Rules of Medicaid” for the answers.

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The Rules of Medicaid

The Rules of Medicaid

Medicaid is a means tested-program.  In short, it means that you must be poor.

What does poor mean in terms of Medicaid?  It means that you can only have a certain amount of money and possessions (called Resources) in your name.  It also means that your well spouse (a/k/a Community spouse) can only have a certain amount of Resources in his or her name.

In addition, depending on the type of Medicaid benefits you receive, Medicaid will only let you, and your spouse, keep a portion of your income.  The break down looks like this for 2009, and appears will be the same for 2010.

The institutionalized person (person in a nursing home) can only have:

  • Resources: – maximum of $13,800 of non-exempt assets.
  • Income Level: $50 per month.

The Community spouse (healthy spouse) is allowed to keep:

  • Resources: – minimum of $74,820 and a maximum of $109,560.
  • Income Level: – $2,739 of the couple’s combined income.

If the couple’s or institutionalized person’s resources exceeds $74,820 or $13,800, respectively, then the excess normally must be spent on the cost of the Long Term Health Care before Medicaid eligibility can be established.

Anything above the Resource level may cause the Department of Social Services (the government organization that oversees the Medicaid program at the County level) to deny your Medicaid application or force you to contribute towards your health care.

Can I transfer assets out of my name to drop down to those Resource levels?

Yes, but for nursing home care, Medicaid will look back over the 5 years preceding the date of your Medicaid application to see if you transferred assets out of your name.  If it sees a transfer in the last 5 years, they will penalize you.  The penalty is a one month denial of Medicaid benefits for approximately every $11,000 you transferred.  The penalty is there to dissuade you from transferring your assets rather than spending them on your Long Term Health care costs.  My next Blog will reveal the 5 Secrets!

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