The Basics of Medicaid and Long Term Care Planning
or…”What the Nursing Home Says You Can and Cannot Keep”
In order to understand Medicaid qualifications for Long Term Care, you first need to know how Medicaid treats your assets. Basically, Medicaid breaks your assets down into two separate categories. The first are those assets which are exempt and the second are those assets which are non-exempt or countable.
Exempt assets are those which Medicaid will not take into account (at least for the time being). While the laws in Illinois differ in some respect, generally the following assets are exempt:
- The Home, (so long as the equity is not greater than $500,000.) The home must be the principal place of residence. The nursing home resident may be required to show some “intent to return home,” even if this never actually takes place.
- Household and personal belonging, such as furniture, appliances, jewelry and clothing.
- One vehicle, there may be some limitation on value
- Prepaid funeral plans and burial plots.
- Cash value of life insurance policies, as long as the face value of all policies added together does not exceed $1,500. If it does exceed $1,500 in total face amount, then the cash value in these policies is countable. Also, term life insurance is exempt.
- Cash (e.g. a small checking or savings account) not to exceed $2,000 in Illinois.
These are basically the assets which Medicaid will ignore, at least for now. Keep in mind, however, that the estate recovery unit may come back to recoup payments made to a Medicaid recipient after the death of the recipient and the recipient’s spouse if they are married.
Most other assets which are not exempt (i.e. the ones not listed earlier) are countable. This includes checking accounts, savings accounts, certificates of deposit, money market accounts, stocks, mutual funds, bonds, IRAs, pensions, second cars and so on. While there are some minor exceptions to these rules for the most part, all money and property, as well as any item that can be valued and turned into cash is a countable asset, unless it is one of those listed earlier as exempt.
While the Medicaid rules themselves are complicated and somewhat tricky, for a single person it’s safe to say that you will qualify for Medicaid so long as you have only exempt assets plus a small amount of cash, (i.e. $2,000 in Illinois).
For a married couple the community spouse (i.e. the one not needing nursing home care) can receive the “Community Spouse Asset Allowance” (CSAA) which is the amount of non-exempt assets the “resident spouse” is permitted to transfer to the “community spouse” without affecting the resident spouse’s eligibility. The current CSAA is $109,560. Of course, this does not mean there are not things which can be done to protect assets beyond these levels. Instead, this issue of the Elder Law Update is designed to review the basics in a way which a caseworker from the Department of Human Services in Illinois would do so.
P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Benefits Coverage for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.
April 8, 2009 at 4:00 PM
April 23, 2009 at 6:30 PM
May 7, 2009 at 4:00 PM
Call (847) 292 1220 to make a reservation in our training room.
•- You don’t want to miss this workshop!
Long Term Care Planning Attorneys
The “3 Phase” Lawyers
Legal Counsel Assisting You in the 3 Phases of Your Life:
– Maturing Years – Will, Trust, Taxes, and Asset Protection
– Senior Years – Long Term Care and Nursing Home Protection
– Post Death Years – Estate, Probate, and Trust Administration
“Educate to Motivate”
Anthony B. Ferraro
The Law Offices of Anthony B. Ferraro, LLC
The Estate & Trust, Elder and Asset Protection Law Firm
Columbia Centre I
5600 N. River Road, Suite 764
Rosemont, IL 60018
PH (847) 563-4887
FAX (847) 292-1221
Any tax advice contained in this communication was not intended to be used, and cannot be used, by you (or any other taxpayer) to avoid penalties under the Internal Revenue Code.
The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material. If the context requires, please consider this letter and the enclosed literature to be Advertising Materials.
This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice. You should never attempt Medicaid planning, Estate Planning, Probate or Trust Administration without the advice of competent legal counsel.