Massachusetts Elder Law

Can you afford nursing home care?


Marshall, Crane & McAloon helps families navigate the many care issues faced by elderly family members, while helping families preserve the assets they have worked so hard to acquire.

Elder law is another aspect of estate planning, focusing primarily on the needs of families and individuals as they age. Issues of aging include senior housing and home care, long-term (or nursing home) care, guardianships and health care documents, Medicare and Medicaid.

The Long Term Care Dilemma

As our population ages, more and more of us confront elder law-related issues, whether for ourselves or our parents. One of the most pressing issues is long-term nursing home care, which usually is not covered by traditional health insurance. Depending on where you live and the level of care needed, nursing home care can cost up to $180,000 a year. The national median cost for a private room in a skilled nursing facility was $92,378. The average stay is slightly more than two years. Most people end up paying for nursing home care until their personal (or family) assets are depleted, then they may qualify for Medicaid to pick up the cost.

Careful planning, however, can help protect your assets, whether for your spouse or for your children. The belt-and-suspenders approach is to purchase long-term care insurance while you are healthy enough to qualify, and to make sure you receive the benefits to which you are entitled under Medicare and Medicaid.

Medicare and Medicaid

Clients are frequently confused over the differences between Medicare and Medicaid. Though their names are very similar, the programs are quite different.

Medicare is an entitlement program, a federal health insurance program in which most people enroll when they turn 65 years old. There are no financial qualification rules.

Medicare has two primary parts: Part A and Part B. Medicare Part A covers in-hospital care, extended care after a hospital stay, some home health care services, and hospice services. The rules for nursing home coverage are very strict and, in fact, Medicare pays for less than 9 percent of nursing home care in this country.

Medicaid is a joint federal and state program. Medicaid is subject to certain federal requirements, and each state implements its own regulations on how its program is managed. The laws and regulations relating to Medicaid are subject to constant change.

Unlike Medicare, Medicaid is not an entitlement program, but rather it is a form of welfare. Medicaid eligibility is determined after the proper application is submitted to the state. There are many Medicaid insurance programs available in Massachusetts, from basic medical coverage to nursing home programs.

Medicaid Requirements

The Medicaid Qualification Process = Legally Protecting the Maximum Amount the Law Allows.

Although Medicaid requirements vary from state to state, they all share one common element: complexity. Each state specifies a maximum allowed income for individuals and couples in order to qualify for Medicaid. Also, an unmarried applicant's total “countable” assets cannot exceed a specified amount called the Individual Resource Allowance, which is consistently very low; currently $2,000. Although certain possessions, like your home and automobile, may be “exempted” for purposes of determining Medicaid eligibility, this figure is still alarming. If the applicant is married, the process becomes more complicated. For the recipient to qualify for Medicaid in any state, the applicant's spouse can keep only “non-exempt” (i.e. “countable”) assets up to a Maximum Community Spouse Resource Allowance of $120,900* in 2017.

What can you do if the value of your “non-exempt” assets exceeds the $120,900* Maximum Community Spouse Resource Allowance? If you give your extra assets away, which seems like an obvious choice, you will encounter greater problems. Violating this “Transfer Penalty Rule” could disqualify you from receiving Medicaid for months or years, depending on how much you gave away. However, there are other planning options.

This is only a brief and oversimplified review of a few Medicaid rules, of which there are myriad more. Navigating them on your own could be a nightmare at best and subject you to penalties at worst. You must seek appropriate counsel before you apply for and seek to qualify for Medicaid, and Marshall, Crane & McAloon can help you through the process.

* Since these amounts (e.g., the “Community Spouse Resource Allowance,” etc.) are adjusted annually, these numbers may vary slightly depending on when the most recent figures are released.

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