If you are suddenly facing the need to qualify for Medicaid to cover nursing home care expenses, either for yourself or your spouse, you are undoubtedly frustrated and likely confused about the eligibility guidelines. As a senior, you are probably particularly concerned about the income and asset limitations the program imposes on applicants. If you are on a fixed income, like most seniors, the income guidelines may not pose a hurdle to eligibility; however, the “countable resource” limit very well may. Ideally, the best way to ensure that you understand the Medicaid eligibility guidelines is to consult with an experienced North Carolina Medicaid attorney. For now, however, it may be helpful to gain a basic understanding of how the countable resource limit and exemptions will impact your eligibility for benefits.
The Need to Qualify for Medicaid
Like many seniors, you may find yourself faced with the need for nursing home care for you and/or a spouse at some point during your retirement years. The longer you live, the higher the likelihood that you will need long-term care. When you enter your retirement years you stand about a 50 percent chance of eventually needing long-term care. If you make it to age 85, your chances of needing long-term care increase to 75 percent. The cost of that care is not cheap. Across the nation, the average cost of a year in a long-term care facility is around $80,000, with the average length of stay running 2.5 years. In the State of North Carolina, you can expect to pay the national average for a semi-private room and about $90,000 a year for a private room in a long-term care facility. Because neither most private health insurance policies nor Medicare will cover those costs, you may be forced to pay out of pocket unless you can qualify for Medicaid, which does cover long-term care costs.
Income and Asset Limits
For almost half of all seniors, Medicaid becomes a necessity because they simply cannot cover the high cost of nursing home care any other way. Qualifying for that care, however, can be tricky because Medicaid is intended to be used by low income individuals and families. As such, Medicaid uses an income and asset threshold that cannot be surpassed by program participants. If, like most seniors, you are living off of a relatively modest fixed income, your income will likely fall below the program limits. Assets, are another issue altogether. An applicant for Medicaid will be subject to the “countable resources” (assets) limitation. In the State of North Carolina that means you cannot have countable resources valued at over $2000 as an individual applicant. If your countable resources exceed the limit you will be penalized, meaning you will not receive benefits for a period of time that is determined by the extent to which your assets exceed the limit. In essence, you will be expected to rely on your assets to cover your long-term care expenses during the penalty period. Once the penalty period runs out Medicaid will start covering your costs.
Exemptions from Countable Resources
For the average senior, $2000 is a very low asset limit, given the fact that you have undoubtedly worked hard all your life to acquire assets. Fortunately, not all of your assets are counted when calculating the value of your “countable resources.” Generally speaking, countable resources include everything but:
- Personal possessions, such as clothing, furniture, and jewelry
- One motor vehicle
- Your principal residence
- Assets that are considered inaccessible, such as an irrevocable annuity or the value of a burial plot.
Although these categories of assets are generally not counted when determining the value of your countable resources, there are exceptions to the exemptions that may apply in your case. For example, while your primary residence is not generally considered a countable resource, it can be if you have a large amount of equity in the home.
Because of the complex nature of Medicaid eligibility, Medicaid planning is always considered a wise addition to a comprehensive estate plan. If you find yourself faced with the need to qualify for Medicaid; however, your countable resources are a hurdle to eligibility, it is in your best interest to consult with an experienced North Carolina Medicaid attorney.
If you have additional questions about Medicaid eligibility and/or Medicaid planning in the State of North Carolina contact the experienced Medicaid attorney at The Law Offices of Cheryl David by calling 336-547-9999 to schedule an appointment.