Help! My Spouse’s Health is Declining and I’m Worried about Financial Ruin!

It is a common problem.  One spouse’s health is declining. The other spouse is relatively healthy but is having trouble continuing to provide care for the unhealthy spouse at home.  Something has got to give. Soon some kind of long-term care facility will be necessary.  But how will they afford it?

According to the 2010 Market Survey of Long-Term Care Costs conducted by Metlife, the annual cost of a semi-private room in a Cleveland area nursing home was $75,190 and a private room was $87,600.

Moreover, counter to popular belief, Medicare will not cover prolonged nursing home care. Medicare Part A provides limited coverage for skilled nursing care if certain requirements are met.   However, even if your level of care meets Medicare’s eligibility requirements, Medicare Part A only covers the cost of a skilled nursing facility for up to 20 days, with the possibility of an additional 80 days on a co-payment basis.

Again, according to Metlife, which based their statistics on the Centers for Disease Control and Prevention, the average nursing home stay is 2.4 years.  Moreover, most nursing home stays are not covered by Medicare at all, as most nursing home residents do not require skilled nursing care, which is a prerequisite to Medicare Part A coverage.

Since Medicare will not cover the costs of long-term care, many couples will need to turn to Medicaid.

Medicaid is a health insurance program funded with state and federal money, administered by the Ohio Department of Job and Family Services.  For those who qualify, Medicaid covers the cost of long-term care. So how do you qualify your spouse for Medicaid while preserving sufficient resources for you to live on as well?

The planning strategies available to you will depend on timing.  Has your spouse entered a hospital or nursing home and stayed for 30 plus days?  If not, there will be more planning options available then if you wait until after this time has passed.

To put it plainly, when your spouse applies for Medicaid, a resource assessment will be conducted, which takes into consideration all of your property as a married couple, regardless of whose name the property is titled in.  The ill spouse will be able to keep $1,500 and the healthy spouse will be able to protect only one-half of the couple’s assets (excluding your home, car, personal affects and other exempt assets) up to a maximum of $109,560.

However, if the couple employs planning techniques, they can often save additional assets and enable the healthy spouse to keep additional monthly income.  Remember, giving assets away will result in a penalty period, and should not be done absent the advice and guidance of an elder law attorney. See http://www.perlalaw.com/blog/why-do-i-need-to-plan-for-medicaid-ie-why-can%e2%80%99t-i-just-give-my-assets-to-my-children/ One planning technique that may be available to a married couple is the revocable trust.

For information on additional planning strategies available to married couples, stay tuned to this blog and consider meeting with a Medicaid Planning attorney.