In previous posts we’ve touched on the fact that Medicare doesn’t cover everything. In fact, on average, Medicare covers only around 50% of a senior’s healthcare costs. Medicare supplement (Medigap) plans are an ideal choice to help fill in the gaps of Medicare, but they also have their limits. For example, a person who needs long-term, round-the-clock care in a nursing home or other facility will not get sufficient coverage from Medicare—that’s because Medicare does not pay for care in a skilled nursing care facility for more than 100 days in a row.
Medicaid Provides Long-Term Care beyond What Medicare Covers
Seniors who need long-term, round-the-clock care, then, generally must pay out-of-pocket. But few seniors have the resources to pay for care long term. This is where Medicaid, a federal free/low-cost health program, comes in. Medicaid will cover ongoing nursing home care, with one very important caveat: Medicaid recipients must have exhausted nearly all of their cash assets. In 2015, a Medicaid recipient can only have $2,000 in cash, in most states. Generally, homes valued at $500,000 or less are not counted toward assets. Higher values apply in some states.
How “Community” Spouses Are Protected
What does this mean for the spouse of someone who needs long-term nursing home care? Thankfully, Medicaid law provides special protections for the spouses of Medicaid recipients (referred to as “community spouses”), to ensure they have the resources needed to live in the community. This will be our focus for the remainder of this post.
Medicaid provides “spousal protections” that work this way: The countable assets of both the spouse who will continue to live in the community, and the spouse who will receive facility care are totaled, as of the date the person enters the facility and stays for at least 30 days. Medicaid refers to this as the “snapshot” date, because Medicaid is taking a “picture” of the couple’s total assets as of this date.
In general (the amounts can vary by state), the community spouse may keep up to one half of the couple’s total “countable” assets, up to a maximum of $119,220, without requiring a hearing or court order. The minimum amount a state may allow a community spouse to retain is $23,844.
Here’s an example of how it works: If a couple has $130,000 in countable assets on the date the Medicaid applicant enters a long-term care facility, the spouse who needs care will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $67,000—that’s $2,000 for the applicant, plus $65,000 (half of the $130,000) for the community spouse. Some states are more generous when it comes to counting assets—check with a Medicaid expert in your state to determine the figures.
The income of the community spouse is generally not counted toward earnings—so, if they continue working, they will not have to contribute to the cost of long-term care for their spouse as long as their spouse is covered by Medicaid. However, some states do require a working spouse to make a contribution toward the cost of long-term care for their spouse if they make in excess of a certain amount of income.
In cases where most of the couple’s income comes from the spouse who will be entering long-term care, the community spouse is generally entitled to some or all of the monthly income of their spouse. Medicaid determines the amount to which the community spouse is entitled, based on his or her living expenses. Read more about Medicaid coverage at Medicaid.gov.
To understand more about how Medicaid and Medicare work together, if you need help with Medicare enrollment, or you’d like more information about Medigap and Medicare Advantage plans, call the experts at CA Medicare today.