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Walt Shurden Elder Law

I have been caring for my husband John for years. He has COPD and complications from diabetes. I promised that I would always keep him at home but now I just can't. John is a big man and I risk my own health helping him around our home because of my chronic back problems. We have an aid during the day but John requires physical help at all hours. He needs nursing home care, and it is going to cost $8,500 a month. We worked hard and lived within our means. We have more savings than Medicaid allows but now I fear how quickly this money will go. What can I do at this late date? Your advice please, Vicky.

Fortunately, Vicky, Medicaid rules provide help for you as the spouse of a nursing home resident.  One important aspect of this help is that you are allowed to have unlimited income.  As a spouse, you can make the most of the "unlimited income rule." How? By employing strategies that convert excess assets to income.

Assume that Medicaid counts your assets of living at home to be $175,000. These resources exceed the 2015 allowable resource limit of $119,220. The excess amount is $55,780 ($175,000-$119,220).  Under rules in place since 2005 you could purchase an annuity with the $55,780 and still qualify your husband for Medicaid.  If you purchased a sixty (60) month level pay annuity with $55,780, you would receive about $929.67 ($55,780 /60) each month, and you would be much more financially secure as you age.

But hold on, Vicky!

On April 17, 2015 H.R. 1771 was introduced in the U.S. House of Representatives. This bill proposes to count one-half of your annuity income as belonging to your husband living in the nursing home.  This bill targets your financial security by reducing the income on which you live.

Assume the bill passes and that you have no better option than to buy the same sixty (60) month level pay annuity.  One half of the $929.67, or $467.83 monthly annuity income, is now considered to be your husband's income who resides in the nursing home.  This amount must be calculated into John's "patient responsibility" and will have to be paid to the nursing home each month unless you have very low income.  You can use only the remaining $467.83 for your own needs.

President George Bush's Administration reviewed Medicaid rules in the Deficit reduction act of 2005. This comprehensive reform looked at what a family could and could not do when one spouse enters the nursing home. This comprehensive review abolished some types of annuities that were considered abusive.  But the Act specifically kept the level pay annuity for the community spouse that is being targeted by H.R. 1771.  The Act reflected the priority that the community spouse, during her life, would be financially secure. 

Congress's did not extend financial security protection to children of the resident.  A provision was added to the law that dealt with the possibility that the community spouse might die during the term of the annuity.  If the spouse dies, the Act requires that the remaining annuity payments must be paid back to Medicaid in an amount up to the full medical assistance provided on behalf of the nursing home resident.

Long Term Care Planning.

Although you may have built a nice nest egg, you never know how much you will need.  Your rainy day savings can be washed away quickly by the flood of bills that come with a stay in long term care.  In order to preserve the assets your family has managed to save, contact a Florida Board Certifed Elder Law Attorney. 

Call to schedule an appointment with out office at 727-443-2708.

 

 

Walt Shurden
Board Certified Elder Law Attorney