The Medicaid Spend Down Scramble – Part 2
The Medicaid Spend Down Scramble - Part 2 In my blog post last week, I wrote about the rushed process of spending down assets to achieve Medicaid eligibility for one spouse without severely impoverishing the other non-Medicaid “community spouse”. While maximizing what that spouse can keep - what is known as exempt assets” - is one consideration, there is an equally important second consideration - avoiding a Medicaid penalty. That’s because any Medicaid penalty - determined by calculating transfers for less than fair value during the 5 year look back period leading up to the Medicaid application - is only assessed once the application has been filed and all other Medicaid requirements have been met. This means that even if we are able to maximize what the community spouse can keep as exempt or non-countable assets, a lengthy penalty will necessitate using those same funds to cover the cost of care during the time frame of the penalty. In the end, it may leave the community spouse with next to nothing should the penalty be of any length and the cost of long term care at the private pay rate - which is much greater than the Medicaid rate - be $15,000 per month or
The Medicaid Spend Down Scramble – Part 3
The Medicaid Spend Down Scramble - Part 3 In my blog post for this week, I finish the topic of the spend down process before Medicaid and why it is so important to the financial well being of the healthy non-Medicaid spouse. As I explained last week, maximizing what that spouse, known as the Community Spouse, can keep is really half of the equation. Avoiding penalties, however, is the other half. That’s because a penalty means an additional period of time the Communtiy Spouse must pay for the ill spouse’s care. That time period begins only after the Medicaid application is filed, all documentation has been provided in the course of the application process and the application has been approved with the penalty as determined by Medicaid. Of course, that means the Community Spouse must pay for the care out of the assets he or she keeps as part of the Community Spouse Resource Allowance (CSRA). So, if the health spouse keeps 1/2 of the assets but only up to a maximum of $154,140 but then has to pay for care for another 2 or 6 or 12 months or longer - the exact time frame being dependent on the length of the penalty period - that
The Medicaid Spend Down Scramble – Part 1
I have written in past blog posts about Medicaid’s 5 year look back and the need to be familiar with the transactions that Medicaid will be reviewing. We still, however, receive many calls where a quick spend down to Medicaid is necessary. In the case of a married couple where only one spouse is applying for benefits, the spend down is especially important to the healthy spouse. Determining the amount that spouse can keep under the community spouse resource allowance (CSRA) is one part of the process. Countable assets are divided in half and the healthy spouse can keep 1/2 of the assets but only up to a certain maximum amount ($154,140 in 2024). In addition to countable assets, the healthy spouse can keep exempt assets such as a home (if either spouse is living in it) and one car. There is no limit to the value of these assets which leads to opportunities to maximize what the healthy spouse can keep, an important consideration since we never know how long that spouse may live or what his/her needs may be. The potential of a Medicaid penalty, however, is another important piece to the equation. A significant penalty which is effectively tacked on to an expected Medicaid start
2024 VA Aid and Attendance Numbers
In this week’s post I will review the updated numbers for 2024 for the VA program that provides a benefit to wartime veterans and their spouses. Known as the VA Aid and Attendance program, this benefit provides a special pension to eligible applicants who need long term care. The maximum pension amount is tied to the same cost of living adjustment as Social Security, which for 2024 is 3.2%. For a single veteran with no dependents the maximum pension one can receive goes up to $2300 per month. For a married veteran the maximum for 2024 will be $2727. For a widowed spouse who needs care the 2024 maximum will be $1478 per month. The Aid and Attendance program is a needs based benefit. This means that to be eligible one must meet a financial test. Different than Medicaid, the VA uses a net worth test. It calculates the applicant’s (in the case of a married couple both spouse’s) annual income and adds that to the countable assets. This is known as the net worth. For 2024 the net worth must be no more than $155,356 to qualify for this benefit. Existing VA A&A recipients should have received a letter from the VA informing them of the new amount they will
2024 Medicaid Numbers
Last month in this blog I updated you on some of the new Social Security and Medicare numbers for 2024. The recently announced cost of living adjustment (COLA) of 3.2% has resulted in a much smaller benefit increase than the past 2 years. Many other federal programs are tied to the Social Security COLA. These include Medicaid and the VA Aid and Attendance programs. This week we will review the 2024 Medicaid numbers. Medicaid’s programs that cover long term care have a strict income cap or limit. For 2024 that number is $2829 per month. Anyone with more than $2829 per month of gross income (before taxes and Medicare and health insurance premiums are deducted) must use a Qualified Income Trust in order to qualify for Medicaid. Medicaid recipients must also have less than $2000 of countable assets. A home is an exempt asset up to a certain limit as long as the applicant is living in it. In 2024 the limit is $1,071,000 of equity. Anything above that amount is countable. For a married couple where at least one of the spouses is living in the home there remains no limit. In other words, the home is exempt in that case no matter the value. In the case of a married couple where only
Another Medicaid Cautionary Tale – Part 3
In my blog post last week, I explained that John was unsuccessful in his attempts to obtain Medicaid benefits for his mom. He then ended up being sued by the facility for the amount of unpaid bills which were not covered by Medicaid. But why did his repeated attempts fail? From my conversation with John it became readily apparent that he didn’t entirely understand the Medicaid process - how detailed and complex it is. The first application he filed was denied. I asked him the reason but he couldn’t recall. It was clear, however that the level of detail overwhelmed him. John said he basically kept refiling the application at least 3 more times but he didn’t address the specific reasons for each denial. It sounded as if he was almost taking a stab in the dark, hoping to hit on the solution. That never works and so I completely understood why he failed each time. What made the problem worse is that with each passing month, John said no one approached him about the unpaid bill so he assumed everything was fine - until he received the summons and complaint. Finally, John asked me if he could appeal any of the denials. Unfortunately, I told him that there is a strict