Finances and Medicaid

Jeanne C.

One theme I've seen over and over in posts on this forum is needing help. So many of us are caring for our spouses at home. Others are looking at facilities but afraid it's going to financially ruin them. I've also seen people state that you have to be near poverty to qualify for Medicaid. That just isn't true.

Our story: My husband was diagnosed with FTD earlier this year. He's progressing quickly and is at stage 6c on the FAST scale. We aren't poor. We own a nice house and, before I took time off to care for him, I was making a good salary. I'm 53 and still have years until I plan to retire for good. I heard from several people that I couldn't get Medicaid for my husband. Guess what? He's on longterm care Medicaid now.

What that includes for us:

• 40 hours/week of in home health aides
• 4 mornings/week of adult day services
• 14 prepared meals/week
• Medicaid health and pharmacy insurance through a managed care organization (we also need to maintain Medicare and Medicare supplemental)
• Incontinence supplies
• Durable medical equipment, should he need it
• Up to $20,000 in work to make our home safe and accessible should need be
• 2 weeks of respite care/year

I've included a link to state Medicaid requirements below. Every state is different, but one thing I've seen pretty consistently across the states I've looked at is that the income, home, car, and retirement accounts of the community spouse (that's the caregiving spouse who is not applying for Medicaid) cannot be touched by the state and do not count against the applicant's eligibility.

How I did it: I saw an incredibly competent CELA! This cost money, but I believe it was worth every penny and then some. They worked with me to gather the needed documents and made sure everything was perfect on the application. They handled the communication with the state. They helped me move assets correctly and legally out my husband's name through the use of a revocable trust and a Medicaid compliant annuity.

https://www.medicaidplanningassistance.org/state-specific-medicaid-eligibility/

At first I felt guilty, like we don't deserve the benefits. But then I realized that this is going to let me keep him home as long as I can without killing myself or eliminating my ability to earn a living. And it will let me still have the retirement I've been working toward. If I had to pay for home health aides, I'd be looking at $70,000/year. If I had to pay for mc placement, it would be easily $80,000/year. That would break almost anyone after a few years.

So, I'm trying to pay it forward by sharing a little of what I've learned. I'm not an expert. But if any of this can help you ease some of your own burden, I'll feel like I did some good. We can't do a d@#% thing about dementia. But maybe we can make it so we can afford to keep living.

OK - I'll stop bugging everyone about Medicaid now 😉

Be kind to yourself,

Jeanne

Anam

This is great information! Thank you for sharing.

wcsc

I agree, this is great information.

charley0419

What State you in. Most of what you said applies in NJ

GG06

Jeanne, this information will be so helpful to so many. Thank you for taking the time to give us such a comprehensive overview of your experience.

Joe C.

Jeanne,

Your experience is actually why everyone here should consult a CELA.

In my situation, and I’m sure many other retirees, all of my savings are in IRAs. From the link you provided above, my state Massachusetts, defines IRAs as assets not income and here is the caveat:

Treatment of Assets for a CoupleTreatment of Assets for a Couple

Medicaid considers all assets of a married couple to be jointly owned. This holds true regardless of the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants.

Since my IRA is considered a jointly owned asset it is count towards what must be spent down to qualify my wife for Medicare. So at least in my state the retirement accounts of the community spouse are counted. When I was looking for a CELA, I interviewed 5 different attorneys before I decided who to hire and every CELA I spoke with told me that my retirement accounts would have to be spent down. I was even presented the option that if maintaining my IRA was my goal then I could divorce my wife but continue to live together and care for her. That way when it was time to to apply for Medicaid my IRA could not be counted as a joint asset. I would never divorce my wife for financial gain so I am now spending down my IRA.

M1

I am very glad it worked out for you so far Jeanne. Every state is in fact different, some more generous than others in terms of what is available and whether there's a waiting list for acceptance. It is certainly cheaper for the state to provide care at home than to pay for institutional care, so it's to their advantage too. The states also differ in terms of how aggressive they are about pursuing estate recovery after death, and what percentage of the expenses they expect to be reimbursed for.

As pointed out in the recent New York Times articles, attempts to initiate any programs for long-term care at the federal level have been shot down as too expensive. There was such a plan in the original Affordable Care Act, but it was removed in committee.

ImMaggieMae

Jeanne, thank you so much for posting this information that we can all potentially benefit from. What state do you live in? Is your husband a veteran? I understood that an IRA, where we have a lot of our savings, is also jointly owned by husband and wife. I plan to care for my husband at home, but the 40 hours of home care you mention would likely cost close to $80,000 a year here in California. Are you on some type of special program?

Jeanne C.

@ImMaggieMae @charley0419 I'm in Delaware. No, we're not in a special program and neither of us are veterans.

Again, totally not claiming any expertise here. Just strongly suggesting seeing a CELA who understands the medicaid requirements in your state. It could be a gamechanger.

Kibbee

In some states an IRA in the Community spouse’s name is considered a non-exempt asset so would have to be spent down before Medicaid funding would kick in. But in other states a Community spouse’s IRA is considered an exempt asset, and would not have to be spent down. Each state administers its own Medicaid funds and establishes their own rules for disbursement, so the state we live in can really make a difference in long term care planning.

There was a reference to setting up a Revocable Trust to shelter assets. In my state a Revocable Trust won’t do it, it would have to be an Irrevocable Trust. An Irrevocable Trust is permanent and once established cannot be changed the way a Revocable Trust can be. Funds once placed in an Irrevocable Trust are no longer under your direct control, and are disbursed by whoever has been designated to manage the trust. An Irrevocable Trust is subject to the 5 Year Look Back rule when applying for Medicaid, (again maybe just in my state) so it’s a tactic to put in place sooner rather than later.

gampiano

This is great news for those of us who live in the right states. Looks like Delaware is ahead of the curve. So glad you were able to achieve this.

Mass, is not, and last time i checked, neither was New York. This is why we need a FEDERAL program, but the way things are going ... I have one word and its not printable.

Maureen

fayth

I agree with Jeanne. I live in Wisconsin. My spouse was diagnosed with AD in 2017 and died earlier this year. Shortly after his diagnosis I met with an excellent attorney who was able to protect many assets for my future. Most significantly, she was able to steer me towards a Medicaid compliant annuity, which effectively transferred my husbands IRA's into an income stream for me. We had a cost share for his Medicaid, based on his pension and social security. But the IRA's ended up legally directed to me, which has made all the difference. We got support at home through a Medicaid program for a few years, and he lived in an assisted living/memory care (NOT nursing home) facility for the last year of his life. I'd interviewed a few attorneys, too, and there were a few who just did not know all of this and one who suggested divorce..... Every situation is different, the states are not all the same, but I was saved from financial ruin. As if this disease isn't devastating enough