Medicaid eligibility for nursing home

[LBrowning]

I'm planning to meet with an elder law attorney to discuss this, but wanted to get my thoughts together first. In the event my wife or I require nursing home care, I'm trying to navigate Medicaid without leaving the other spouse in poverty. Our combined assets are exempt/below threshold, but my 401k ($500k) pre-tax is the issue. Should I do Roth conversions in my wife's name? Or, do withdrawals and pay off our home? Other options? TIA.

 

[harllee]

Have you looked at the nursing homes in your area that take Medicaid versus the private pay /CCRCs? In my area that nursing homes that take Medicaid are pretty awful. That is why I used my money to move into a CCRC with a very nice nursing home.

 

[badatmath]

I believe there is a 5 year lookback for assets transfer so not sure that would protect you if one of you needed care sooner?

My goal is to stay out of nursing homes in general and medicaid ones in particular so I am not the best person to ask.

 

[CardsFan]

I'm planning to meet with an elder law attorney to discuss this, but wanted to get my thoughts together first. In the event my wife or I require nursing home care, I'm trying to navigate Medicaid without leaving the other spouse in poverty. Our combined assets are exempt/below threshold, but my 401k ($500k) pre-tax is the issue. Should I do Roth conversions in my wife's name? Or, do withdrawals and pay off our home? Other options? TIA.

Re: Bold
I am pretty sure you cannot convert your 401k into your wife's Roth.

But I also second Harlee's comments about Medicaid only nursing homes.

I would make sure I had enough to pay full freight for 2-3 years in a nicer place. Many (Most?) will accept Medicare after a few years of full pay.

Also, that tax deferred money will get pretty good tax treatment if used for skilled nursing.

Just my thoughts.

 

[badatmath]

Re: Bold
I am pretty sure you cannot convert your 401k into your wife's Roth.

But I also second Harlee's comments about Medicaid only nursing homes.

I would make sure I had enough to pay full freight for 2-3 years in a nicer place. Many (Most?) will accept Medicare after a few years of full pay.

Also, that tax deferred money will get pretty good tax treatment if used for skilled nursing.

Just my thoughts.

Am I wrong in thinking they would automatically take his Social Security towards the bill? (Not Medicare).

 

[zl55lz]

I'm planning to meet with an elder law attorney to discuss this, but wanted to get my thoughts together first. In the event my wife or I require nursing home care, I'm trying to navigate Medicaid without leaving the other spouse in poverty. Our combined assets are exempt/below threshold, but my 401k ($500k) pre-tax is the issue. Should I do Roth conversions in my wife's name? Or, do withdrawals and pay off our home? Other options? TIA.

I think it is different in different States so one would need to check specifics. In CA, for instance, I believe they take a certain part of the person's income who is going into the facility, but leave a certain amount for the spouse staying in the residence. There are also asset exclusions.

A good place to start might be with the local County. There might be an agency called something like Area Agency on Aging or similar.

 

[CardsFan]

Am I wrong in thinking they would automatically take his Social Security towards the bill? (Not Medicare).

I am pretty sure you are correct.

I have to admit I have not looked into this deeply, as I have NO desire to ever have one of us in this situation, and have saved accordingly.

 

[athena53]

Am I wrong in thinking they would automatically take his Social Security towards the bill?

Yes- they leave you about $30/month for incidentals.

 

[Mark1]

As some have noted, Medicaid facilities may not always be great, but I suspect that many have both full-paying customers and medicaid customers and are totally fine. My MIL and aunt are actually in the same nursing home. One pays slightly less $10,000/month and other is on Medicaid and pays all of her SS check minus the $50/month she gets to keep for herself. Also, to stay qualified for Medicaid in Iowa (if unmarried), total assets can not exceed $2,000.

Prior to my step-father death, my DM would have gotten to keep ~$125,000, much of their SS income, and the house if Step father entered into NH and depleted much of their funds prior to going onto Medicaid. However, as others have stated, it varies state-to-state.

 

[ncbill]

Here (and I bet in most states in the USA) stand-alone nursing facilities will have nearly all their residents paid for by Medicaid.

So, sadly, care usually biases downward even if you are a private pay resident in the above.

Best if you can find one run by a religious organization.

Here also it's only the nursing facilities attached to CCRCs that are private pay-only, including LTCi benefits.

But there's no chance of getting into the latter without starting out at the CCRC in independent or assisted living.

 

[marko]

FWIW, my brother was in a SNF for 8 months. He was the only private pay they had and had trouble figuring out how to take payment. Everyone else was Medicaid. The place was outstanding. Really exceptional.

However, one of his therapists took me aside and begged me to find a way to get him on Medicaid. "I could give him so much more attention if he was on Medicaid " His assets were such that he had to continue private pay but they helped him tremendously in his (partial) recovery.

I tried to pay for additional therapy beyond his insurance but was informed that was illegal. The reasoning I was told is that they have to prevent "rich people from getting better care than Medicaid people ". Massachusetts, but each state is different.

 

[Surewhitey]

Prior to my step-father death, my DM would have gotten to keep ~$125,000, much of their SS income, and the house if Step father entered into NH and depleted much of their funds prior to going onto Medicaid. However, as others have stated, it varies state-to-state.

This is my general understanding for married folks.

We recently put DW's mother in a managed care (4-5 people in a house with a "helper") in TX. Medicaid was only available for sub $23k annually (appx) and she was getting a small pension and SS to the tune of $31k so we collect this and then pay the difference (split between siblings) and manage payments. We locked in a 3 yr price contract for her and hope all goes well.

There's a vast difference in services & costs in these type homes and go from under $3k and up considerably. They really interviewed quite a few and decided on one within a 30 minute drive of DW and reasonable on cost. We'll have to see on the longer term outcome.

 

[youbet]

Here (and I bet in most states in the USA) stand-alone nursing facilities will have nearly all their residents paid for by Medicaid.

Not true in Illinois.

 

[ncbill]

Not true in Illinois.

Are you sure you're not thinking about assisted living facilities versus skilled nursing care facilities?

 

[LateToFIRE]

Not true in Illinois.

Don't see why Illinois would be the exception to the rule. What frequently occurs [for skilled nursing facilities] is that patients are initially admitted under Medicare (maybe that's where your stats are coming from), often for rehab. BUT, if they end up staying (I think 90 days is the threshold), then they have to become either private-pay or Medicaid. And in the case of private-pay, assets will likely be exhausted for most of the non-millionaire general population, after which Medicaid will kick in. So, most LTC roads ultimately lead to Medicaid.

 

[badatmath]

Are you sure you're not thinking about assisted living facilities versus skilled nursing care facilities?

Curious why you think there are so many medicaid beds? I know 3 people who recently had nursing homes and all were private pay patients. I can't say that is a representative sample but I mean I don't think it is super odd either.

 

[LateToFIRE]

Here (and I bet in most states in the USA) stand-alone nursing facilities will have nearly all their residents paid for by Medicaid.

So, sadly, care usually biases downward even if you are a private pay resident in the above.

Best if you can find one run by a religious organization.

Here also it's only the nursing facilities attached to CCRCs that are private pay-only, including LTCi benefits.

But there's no chance of getting into the latter without starting out at the CCRC in independent or assisted living.

In my experience, getting into the nicer skilled nursing facilities is a bit like applying to a country club - long waiting lists - need connections. They want private-pay. And not only do they want private-pay, but they want to see enough assets to cover at least six months to a year, if not more. They systematically try to avoid Medicaid.

 

[LateToFIRE]

Curious why you think there are so many medicaid beds? I know 3 people who recently had nursing homes and all were private pay patients. I can't say that is a representative sample but I mean I don't think it is super odd either.

Copying from prior post: What frequently occurs [for skilled nursing facilities] is that patients are initially admitted under Medicare, often for rehab. BUT, if they end up staying (I think 90 days is the threshold), then they have to become either private-pay or Medicaid. And in the case of private-pay, assets will likely be exhausted for most of the non-millionaire general population, after which Medicaid will kick in. So, most LTC roads ultimately lead to Medicaid.

 

[Sunset]

OP - Divorce now, then each of you will be protected from asset drain by the other person. There is no good way to avoid paying your own freight costs for a nursing home, but a divorced person doesn't force the ex-spouse to pay.

I wonder if the medicaid rules could be considered anti-marriage (marriage penalty), versus 2 individuals sharing a life for decades ?

 

[zl55lz]

This is my general understanding for married folks.

We recently put DW's mother in a managed care (4-5 people in a house with a "helper") in TX. Medicaid was only available for sub $23k annually (appx) and she was getting a small pension and SS to the tune of $31k so we collect this and then pay the difference (split between siblings) and manage payments. We locked in a 3 yr price contract for her and hope all goes well.

There's a vast difference in services & costs in these type homes and go from under $3k and up considerably. They really interviewed quite a few and decided on one within a 30 minute drive of DW and reasonable on cost. We'll have to see on the longer term outcome.

This sounds similar to what in this area are called "six-beds" in that they have a limit of 6 residents, they are basically licensed converted homes with staff who are trained to take care of people. My wife's parents both used these and we were very pleased with the care they received.

In our area the regs did not allow a person to remain in an Assisted Living if they needed two staff to help them transfer from bed to wheelchair and such, but these six-beds would, and were trained to use hoists to move them if needed. They were more like home, and about half the cost or less of a nursing facility, and administered meds, etc.

This might be an option before or rather than having to go to a Skilled Nursing Facility. A County Aging Agency should have a list.

 

[jim584672]

Move to California, they are getting rid of the asset test for elderly Medicaid next year. All other states have a spousal impoverishment allowance of $148,620. That means you any amount over that would need to be spent.

 

[Sojourner]

In the event my wife or I require nursing home care, I'm trying to navigate Medicaid without leaving the other spouse in poverty. Our combined assets are exempt/below threshold, but my 401k ($500k) pre-tax is the issue. Should I do Roth conversions in my wife's name? Or, do withdrawals and pay off our home?

Are you asking exclusively about nursing homes (aka, "skilled nursing facilities"), or are you also concerned about how to pay for assisted living and/or memory care if it becomes necessary? I'd guess there is a good chance that your or your wife will need AL or MC before a nursing home becomes necessary, so have you thought about how to handle that financially? In my experience, folks who end up in nursing homes are usually in the very end stages of life and don't linger there for years (usually, much less than a year), whereas the time in AL and/or MC can be quite long.

 

[badatmath]

Copying from prior post: What frequently occurs [for skilled nursing facilities] is that patients are initially admitted under Medicare, often for rehab. BUT, if they end up staying (I think 90 days is the threshold), then they have to become either private-pay or Medicaid. And in the case of private-pay, assets will likely be exhausted for most of the non-millionaire general population, after which Medicaid will kick in. So, most LTC roads ultimately lead to Medicaid.

None of the ones I knew went to nursing home from hospital, not that it makes a difference. One had 24/7 nursing at home and her daughter finally realized the cost was substantially more than being in a home would be and moved her. It was sort of sad because she only lasted a few months and would have rather been home. (They were quite well off, it was not a matter of not having enough).

Seems a little surprising to me people cannot cover 1-2 years* as most people just won't last that long in a nursing home - unless memory care or something. I don't actually know anyone IRL who has done assisted living.

(*I say this as one of the poorest people on this msg board too)

 

[RunningBum]

I'm planning to meet with an elder law attorney to discuss this, but wanted to get my thoughts together first. In the event my wife or I require nursing home care, I'm trying to navigate Medicaid without leaving the other spouse in poverty. Our combined assets are exempt/below threshold, but my 401k ($500k) pre-tax is the issue. Should I do Roth conversions in my wife's name? Or, do withdrawals and pay off our home? Other options? TIA.

My brother and I got one parent on Medicaid for assisted living earlier this year. She's in a good place, unlike some Medicaid only facilities in her area, but to get her in she had to have enough assets to pay for the first year.

To qualify they had to get their combined assets, including his IRA, down to about $141K, in their state. There was a 5 year look back to make sure they didn't give away any assets to reach that level. We got the IRA money out before reach $141K so that the $141K limit did not included a deferred tax liability.

At that point Medicaid covers her assisted living and other medical expenses. She has a savings account with no more than $4K allowed at the end of any month. He has the other $137K solely in his name. He also gets both SS checks.

They did not look into any trusts or other ways to try to keep their money. Methods vary by state so the elder law attorney should know the rules and options in your state.

I know that you cannot convert your IRA into a Roth for your wife, and it doesn't matter anyway. They consider all of your assets as joint for these purposes, and Roth and tIRA/401K money are included in the Medicaid asset limit.

I think your home is exempt but check with your attorney. It would make sense to me to pay off the mortgage before reaching the Medicaid asset limit so that the "community spouse" (the one not on Medicaid) does not have mortgage payments to make with the other assets they are allowed to have.

It's good to know your options but some of those may be extreme for a situation that may or may not happen.

 

[TheWizard]

Medicaid is for poor people.
I'll never be in that category, either income-wise or asset-wise.
So I'll turn the page...