Medicaid (taxpayers) pay for the majority of Long Term Care (LTC) in this country, and have for some time. To qualify for Medicaid one must be impoverished, meaning they have spent their assets down to $2000, cashed in life insurance that would pay out more than $1500 at death, and are allowed to keep $45/month of income. In addition, they are allowed to retain money to pay for final expenses at death if that money is in an irrevocable burial trust, one of the few things I can do to help at the last minute.
Married couples have further financial protections for the spouse at home. That spouse can retain ownership of a home in Wisconsin (Medicaid will build up a lien against it as they pay for care) valued at up to $814,ooo for 2014, up from only $802,000 in 2013.
If the “at home” spouse has income below $2931/month, the institutionalized spouse can shift income to that “at home” spouse to bring them up to this number.
In many parts of the U.S. the “at home” spouse is allowed to retain one half the assets the couple had, but those assets cannot exceed $117,240 for 2014. If the couple possessed $200,000 of assets, then the “at home” spouse can retain half – $100,000. If the couple possessed $800,000 of assets, then the “at home” spouse can retain half, but no more than $117,240.
In Wisconsin the “at home” spouse need not spend down below $50,000, while in many states the “at home” spouse’s lower limit is $23,448. As you can see, Wisconsin is much more generous than other states are in this regard.
In some areas of Wisconsin the Medicaid dollars are primarily earmarked for nursing homes, meaning that is where you may end up rather than in home care or an assisted living facility if your funds run out paying for care. Nursing homes lose up to $3400 a month on the Medicaid reimbursement and cannot afford to fill their facility with 100% Medicaid recipients.
Medicaid is wonderful for people who have no options of paying for LTC out of pocket. They are taken care of. It was not designed to protect the inheritance from wealthy seniors to their baby boomer children.
If you have assets you would like to retain and eventually pass on to family, or you would like to choose where and how you will be cared for should the time come when you cannot manage on your own anymore, perhaps it would be prudent to investigate LTC insurance. It pays for care in your home, adult day care, assisted living facilities, and nursing homes.
Most people do not need as much of this insurance as they might initially suspect. Lifestyles change when one cannot be as active as they once were. Thus less vehicles, toys, travel costs may be needed and some of the available income can go towards the expense of LTC. Consult with an expert in this field to learn what is appropriate for your situation and then make a decision to pursue it or not. More information can be found at www.TheLongTermCareGuy.com