Most people don’t know the difference between a personal care home and a skilled nursing facility. Sadly, there is also no “help desk” for Seniors, and it can be overwhelming not knowing what to do when you need help. At Sechler Law Firm, we have lawyers on our team, as well as a Social Worker and a Registered Nurse, so we can help people find the right kind of care, while helping them figure out how to pay for it. There is no “one-size-fits-all” for senior healthcare. Most people over the age of 65 are on Medicare for primary healthcare. When we work with a senior who needs some form of long-term care, they are often unaware that Medicare won’t pay for their care in a nursing home. This is the single biggest cost seniors will face.
Most seniors have a home and a nest egg to get them through their retirement years, but they are often unprepared for the cost of needing long-term care. Sadly they are on their own when it comes to paying for this care. At $180,000 per year, there are not many families who can afford paying that for very long. The only other payment source available to pay for long-term care, is Medicaid, or Medical Assistance if you are in Pennsylvania. Medicaid rules vary in each state, and while Medicaid is partially Federally funded and state implemented, all states do it differently.
Medicaid Rules
The general rules are that Medicaid treats single people differently than married people, and assets are treated differently than income. A single person, namely Jane, has dementia and needs to go to a skilled nursing facility for care. She is still allowed to own a home, but not the $200,000 she has in her savings account, to be eligible for Medicaid. Jane has to write a check each month to the care facility for $15,000, until the $200,000 is spent. This means she is only allowed to keep $2,000 to be eligible on an asset basis for Medicaid. Jane has a social security check and her pension that she receives monthly, but this income must go to the nursing home every month, for the Patient Payment Liability.
Medicaid for Single People
Jane can only keep $45 per month, for all of her personal needs. Despite not having money, Jane is still allowed to own a home. The problem is she will not be able to afford to pay the monthly bills for the house, so her kids or Power of Attorney might decide to sell the house. This means Jane would have cash from the sale of the house, so would lose her Medicaid benefits. Only when she has spent that money is she eligible for Medicaid again. Essentially, she would lose her home because she has the misfortune of having dementia and needing long-term care. If Jane were to have cancer, which is not better from a medical standpoint, she would still get her treatment which is considered acute, paid for by Medicare. Unfortunately since her medical care is custodial, which includes dementia, Parkinson’s disease or stroke, Medicare won’t pay for care.
If Jane’s kids decide not to sell the house, knowing they will inherit the house according to Jane’s Will, they make arrangements to pay the monthly costs for the house. However, the kids may still lose the house when Jane passes away, due to the Estate Recovery Program. Whoever the executor is, will be forced to sell the house to get money to pay back the state of Pennsylvania, for Jane’s care. Some states exclude the primary residence from this claim, such as Florida, while Pennsylvania will still make this claim. Essentially, a single person will lose everything if they go to a nursing home, which is tragic.
How Medicaid Works with Married Couples
When it comes to the way Medicaid works with married couples, the situation changes. Let’s assume Fred and Wilma are a married couple, and Fred is in the nursing home. Wilma is living in the community, and from an eligibility standpoint, she is allowed to keep the house. Wilma can keep half of the money, while the other half is spent on Fred’s care. Assuming the couple owns a house and $200,000, Wilma keeps $100,000 and the nursing home will get the other $100,000. Once Fred’s share is gone, he is eligible for Medicaid. However his income also has to go to the nursing home every month. Wilma may be allowed to keep some of Fred’s income as well as her own income, but it may not be enough to live off.
What is the Solution?
Bear in mind that if Wilma still lives in the house, the cost of living is the same, but there is less income because some it goes to the nursing home. Also, while Wilma can keep half the money, there is a limit of $138,000 for her share. Even if there was $500,000 shared between them, instead of having $250,000, Wilma’s share would still only be $138,000. If Fred and Wilma asked us to help them, we would advise Fred to transfer the house to Wilma’s name. Rather than Fred paying the $100,000 to the nursing home, we could protect that money for Wilma, and she could keep Fred’s half of $200,000. There is a Medicaid rule that states that a healthy spouse’s income is safe from the nursing home. This means that assets can be converted to income, and Wilma can get a spousal annuity plan. This would mean Wilma would get an income.
Let Sechler Law Firm Help You
It is unfortunate that many people are unaware of the ways you can protect your money from the nursing home, and at Sechler Law Firm, we believe people need to know. If you are, or you know of somebody who is in this situation, please reach out to us, or encourage those you know, to contact us. Even after a nursing home admission, we can still protect money. Besides the harsh Medicaid rules, there are also exceptions to the Medicaid rules and we understand how these exceptions may apply in your situation. It is not uncommon for us to protect 50-60% of a single person’s assets, and even more than that for a married couple. This is complicated so we advise you to seek the help of an elder law attorney. Reach out to us! Give us a call on 724 546 4227.
Learn More at Our Workshops
It is not the nursing home’s fault that we have this broken system. The nursing home provides care and it should be paid. Ideally, we would prefer for our clients to get their care and have it paid for by the state. We would rather not have our clients paying privately for their care. It is for this and other reasons that we offer an Asset Protection Workshop where you learn more about how to protect assets from long term care costs. Visit sechlerlawfirm.com/workshops to register today.
We also have many free resources available on our website, which can help you. By providing education, we hope that you will be able to make an informed decision. There are many free resources available on our website including downloads, video and articles. We hope you find these resources informational and of benefit.
We offer FREE Consultations, so we can establish how best to help you. During the Consultation we won’t sell you anything. What we will do is ascertain if we can help you, or whether we should refer you to another trusted resource. Let’s get our seniors the care they need without going broke in the process!
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