I'd like to reopen a discussion on Medicaid, as there have been some different and conflicting points made, that really need some clarification. Different statements are made on some senior sites, and even senior legal websites.
Naturally everyone here would like to be 100% sure that retirement will be safe, and in many cases that nest egg assets would be passed on to the family. Life doesn't always work that way and while we try to protect ourselves, it's good to consider alternatives. At the present time, our national safety programs include Medicaid. Knowing how it works can help in retirement planning.
Let's start with an assumption that we may need medicaid, to pay for nursing home or medical expenses in the event long term care is needed... and further that we want to protect a partner from becoming destitute, in order to pay for nursing home expenses.
Under current rules, there are certain items that can be kept, while other assets must be given over to the state, to pay for the nursing home care.
That is the area that needs (for me) clarification, as I have read different interpretations that get confusing.
State rules differ.
First of all, the assets that can be taken by the state are subject to a 5 year lookback rule, so that if you see a nursing home or heavy doctor's bills coming, you can't unload that million dollar bank account.
Other items to be considered for protection are:
-An automobile
-The home... healthy spouse to keep
-Personal belongings required to maintain the home, other income producing property such as rental property or business income producing property with certain limits.
- Personal life Insurance cash value(not term)
-Cash- depends on state law
-Funeral expenses
Now this is where the questions come in...
-Cash.. 2K for resident - ?? for partner??
-Maximum value of the retained home? $500K ...more?Dependent on state?
-Auto value $4.5K.more?
-Income producing property... 6% minimum ROI ?
-Lookback for house sale? ie. 5 years? or can it be bought in less time?
-Time period between selling one home and buying another?
-After death, can remaining partner keep the house?
-After death, can the state put a lien on the property?
-Circumstances where the state may place a lein on the house before death?
I believe, (not sure though)... that the partner living outside the nursing home can keep personal SS, pensions and or annuities, and one half of co-owned cash assets, but there is stall a question about retaining the full value of the home.
For long term planning, keeping the home (as opposed to downsizing) or renting, could have a major impact on decisions, and the time to make the plans may have to be 5 years before they are needed.
Naturally everyone here would like to be 100% sure that retirement will be safe, and in many cases that nest egg assets would be passed on to the family. Life doesn't always work that way and while we try to protect ourselves, it's good to consider alternatives. At the present time, our national safety programs include Medicaid. Knowing how it works can help in retirement planning.
Let's start with an assumption that we may need medicaid, to pay for nursing home or medical expenses in the event long term care is needed... and further that we want to protect a partner from becoming destitute, in order to pay for nursing home expenses.
Under current rules, there are certain items that can be kept, while other assets must be given over to the state, to pay for the nursing home care.
That is the area that needs (for me) clarification, as I have read different interpretations that get confusing.
State rules differ.
First of all, the assets that can be taken by the state are subject to a 5 year lookback rule, so that if you see a nursing home or heavy doctor's bills coming, you can't unload that million dollar bank account.
Other items to be considered for protection are:
-An automobile
-The home... healthy spouse to keep
-Personal belongings required to maintain the home, other income producing property such as rental property or business income producing property with certain limits.
- Personal life Insurance cash value(not term)
-Cash- depends on state law
-Funeral expenses
Now this is where the questions come in...
-Cash.. 2K for resident - ?? for partner??
-Maximum value of the retained home? $500K ...more?Dependent on state?
-Auto value $4.5K.more?
-Income producing property... 6% minimum ROI ?
-Lookback for house sale? ie. 5 years? or can it be bought in less time?
-Time period between selling one home and buying another?
-After death, can remaining partner keep the house?
-After death, can the state put a lien on the property?
-Circumstances where the state may place a lein on the house before death?
I believe, (not sure though)... that the partner living outside the nursing home can keep personal SS, pensions and or annuities, and one half of co-owned cash assets, but there is stall a question about retaining the full value of the home.
For long term planning, keeping the home (as opposed to downsizing) or renting, could have a major impact on decisions, and the time to make the plans may have to be 5 years before they are needed.
Last edited: