What Are My Options Once Money Runs Out
If your money runs out and your family is not able to step in and cover costs, your options will depend on your state and whether you are residing in an assisted living or nursing home. At a nursing home, federal law entitles you to the right to file a hardship waiver with your states Department of Health and Human Services. A hardship waiver must document how the move would endanger your health or your access to shelter and food.
While a federal hardship waiver does not apply to assisted living facilities, you can still reach out to government agencies, such as your Area Agency on Aging or your local long-term care ombudsman, which every state is required to have under the Federal Older Americans Act. Your ombudsman may be able to negotiate with the facility, secure financial aid to pay for your care or find you a new home. Finally, a lawyer through your local Legal Aid agency may take your case at no cost to you.
How And When Medicaid Can Pay For A Nursing Home
Medicaid was created in 1965 as a social healthcare program to help people with low incomes receive medical attention. Many seniors rely on Medicaid to pay for long-term nursing home care.
Most people pay out of their own pockets for long-term care until they become eligible for Medicaid. Though Medicare is an entitlement program, Medicaid is a form of welfareor at least thats how it began. So to be eligible, you must become impoverished under the programs guidelines, says Laura M. Krohn, a Rhode Island-based elder law attorney.;
Let’s look at how the economics work, and how Medicaid can be used to pay for a nursing home.
H Spending Down/gifting Assets
Resources must be reduced to the property limit for at least one day during the month in which a person is establishing eligibility. Giving away resources may render a person ineligible for a period of time running from the date of the transfer.
Penalties for transferring or gifting away non-exempt assets only apply if a Medi-Cal beneficiary or applicant enters a nursing home. If an applicant lives at home and gifts away property, there are no transfer penalties. The transfer rules are triggered when a person enters a nursing home and applies for Medi-Cal. The Medi-Cal application will ask if the applicant transferred any assets within the 30 months prior to the date of the application. The transfer rules apply only to non-exempt assets.
A transfer of non-exempt assets can result in a period of ineligibility which is the lesser of 30 months or the value of the transferred assets divided by the average private pay rate at the time of application. The current APPR is $10,298 .
If Mr. D transfers $9,900 to his son and $10,900 to his daughter in June, 2020, each transfer is calculated separately. Each amount transferred is divided by the APPR of $10,298, and Mr. D will be ineligible for June, 2021 only.
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What Exactly Is Ssi
SSI or Supplemental Security Income is a state and federally funded initiative. The purpose of the program is to ensure that seniors over the age of 65 maintain a certain monthly income. The program targets seniors and senior couples that are disabled, have a limited income, are blind, or who have fewer resources at their disposal. For single seniors, the limits are $2,000 while the limit for a senior couple is $3,000. A seniors home, car, and a few other resources are exempt from limit calculation. Any other resources than those that are specified as exemptible may cause a senior to lose their qualification for SSI. SSD is another form of SSI which is available for disabled seniors who qualify. Those with a disability are able to apply their SSD benefits directly to the cost of their assisted living situation.
Paying For Senior Care With Ssi
Social Security Supplemental Income payments are provided on a monthly basis and can be used for a variety of expenses. Some seniors may choose to use their payments to cover the cost of their food, entertainment, shelter, clothing or even medical care. An income threshold must be met in order to qualify for SSI. Most seniors who are able to receive SSI also qualify for Medicare.; The government benefit eligibility screening tool is a great way to see if you or your loved one qualifies for SSI, SSDI, Medicare, veterans benefits or any other federal senior assistance programs.
Most assisted living communities will have several different payment options for seniors, including those who would like to use SSI, SSD, or OSS benefits. In some facilities, seniors may use their full SSI benefits to cover their full expenses. Not every assisted living community will provide subsidies for their monthly fees for those on SSI, so it is important to check the location’s rules prior to enrollment. Seniors who require skilled nursing care can use a combination of Medicaid and SSI for their care. Other senior care payment options are PACE, Long term care insurance, veterans aid, and life settlements. Every senior will face a different set of circumstances, and it is important to keep current and future health complications in mind when choosing a payment option.
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Using Personal Assets To Pay For Nursing Home Care
Most residents entering a skilled nursing facility pay for their care using their own funds at least initially. This might mean dipping into your loved ones personal savings, stocks or other assets. However, its not uncommon for adult children and other family members to pool funds to help cover the costs of nursing home care until their elder dependent becomes eligible for a public benefit program like Medicaid.
Families seeking accommodations for a loved one sometimes turn to more creative ways of using personal assets to cover costs, such as by taking out a reverse mortgage. A reverse mortgage allows a homeowner to convert the home equity theyve built up over time into cash. The homeowner can then access these funds either in monthly payments, a lump sum or via a line of credit.
Regardless of how you come up with the cash for your loved ones nursing home stay, its crucial to work with reputable financial institutions and to ensure that you understand all of the terms and fees involved. Its also important to check with your skilled nursing facility about what types of care and services are included in the fees being charged, and which ones may cost extra.
Could assisted living be a better option for you?
If nursing home costs are unreasonable for your personal budget and a physician finds that constant supervision isnt necessary for your aging loved one, it may be possible that an assisted living facility could meet their care needs.
How Much Does Medicare Pay For Long Term Nursing Home Care
Medicare helps to pay for your recovery in a skilled nursing care facility after a three-day hospital stay. Medicare will cover the total cost of skilled nursing care for the first 20 days, after which youll pay $185.50 coinsurance per day . After 100 days, Medicare will stop paying.
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Terms Acronyms & Definitions
Before we get into our guide, let’s break down a few common terms to help you better understand their meanings.
OSS These are state-based assistance funds given in addition to those paid out by SSI. The final amount each person receives will depend on their living arrangements and level of need. Social Security cant pay for assisted living directly and will often use OSS as a method of offering payment assistance. OSS may also be called SSP depending on your location.
Assisted Living This is a residential community or facility that offers long term care for seniors and other adults. The care provided is not medical and only assistive in nature. This can include help with bathing, grooming, mobility, meals and other general daily tasks.
Social Security This is a form of income provided for citizens once they retire. There is a certain number of credits a person must pay into the program over their lifetime in order to qualify. You can read more about the specifics of Social Security here.
SSI SSI is a form of financial assistance for those who have a limited number of assets and lower-income. This program will evaluate a senior’s total income and offer a supplemental balance to bring their income to a pre-arranged monthly amount. The benefit will vary from person to person depending on their income level.
Income Limits For Medicaid Nursing Home Coverage
Single person State Medicaid programs limit the income of an unmarried nursing home resident in two different ways. One way, used by some state Medicaid programs, establishes a monthly income eligibility limit. This limit varies by state but generally sits at about $2,313 per month. If a Medicaid applicant has income higher than the Medicaid limit in one of these states, that person isnt eligible for Medicaid coverage of nursing home care.
Other states have no income limit but instead require the beneficiary to pay almost all income to the nursing home, with Medicaid paying the balance of the nursing homes charges. In these states, the Medicaid program allows the resident to keep only a small amount about $50 to $100 per month for personal needs. Some of these states also allow a small amount of income to be retained by the resident for upkeep on the residents home, usually only for up to one year of admission to the nursing home, and only if a physician certifies that the resident might be able to return home. Find out more about state specific income eligibility rules.
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Is Home Health Care Covered By My Social Security Disability Benefits
If you have become disabled and can no longer work due to a severe injury or medical condition, you might be entitled to receive Social Security Disability Insurance benefits. The application process can be confusing and time-consuming. For that reason, there are many misconceptions and gray areas that cause disabled individuals to not fully understand what they can expect from their SSDI benefits if they are approved.
One common question that many disabled individuals and their families have is if home health care services can be covered under SSDI benefits. The truth is, every individuals case is different, and the benefits you receive completely depend upon the circumstances of your disability. Speaking with a skilled SSDI attorney, like those at the Law Offices of Dr. Bill LaTour, is always in your best interest, because they can explain the complicated system and help you get the most out of your benefits.
Where Can I Get More Information About Medicare Coverage For Nursing Facility Care
If the person youre caring for is in the hospital and youre looking for answers about follow-up nursing-facility care, contact the hospitals discharge planner, who can arrange this type of care, or the hospital ombudsman, whos trained in Medicare issues and helps patients understand them.
You can also get information about Medicare nursing home coverage directly from Medicares website or by calling 633-4227. If the person youre caring for has already been referred to a particular nursing facility, the intake administrator for that facility can also help with Medicare-related questions or problems.
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Using Private Insurance To Cover Nursing Home Care
Many Americans use long-term care insurance to cover nursing home fees and other personal care costs in their elder years. Long-term care insurance is designed to lower out-of-pocket expenses for stays in a broad range of care settings, including nursing homes and assisted living facilities. Its best to buy a long-term care insurance policy well before the need to use it is likely to arise, even if this means paying premiums for many years. Premium rates are much lower for people who are in good health when they purchase their policy.
If your loved one has a life insurance policy, cashing it out can help him or her pay for nursing home costs, and certain types of life insurance will allow the policyholder to use it as long-term care insurance. If a life insurance policy includes accelerated death benefits, policyholders are able to take a portion of their death benefit while theyre still alive in order to pay for long-term care. In cases where the death benefit is not enough to cover nursing home costs, the policyholder might choose a life settlement, in which he or she sells the life insurance policy to a third party.
Today, there are also a number of combination life insurance policies that include long-term care benefits, although these policies tend to be pricier than standard life insurance.
What Is Considered An Asset When Applying For Medicaid
Assets that are considered when applying for Medicaid include your checking and saving balances as well as any CDs, bonds, or stocks you may own. If you own property in addition to your primary residence or more than one vehicle, these will also be considered assets.;
Generally, most states allow a single Nursing Home Medicaid applicant over the age of 65 to retain $2,000 in assets in 2020. However, the exact figure might be different for the state you live in and you should contact your local Medicaid office for more information.;
Additionally, you can keep your life insurance provided it has a face value of less than $1,500 and up to $1,500 set aside for burial arrangements. Your primary home, personal property, and one vehicle are not considered assets either. However, in most states, if your homes equity value is more than $595,000, Medicaid will not pay for nursing home care. If someone else owns your primary residence jointly, your equity interest is only half of the homes equity value.;
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Whos Eligible For Medicaid Nursing Home Coverage
Medicaid nursing home coverage is available only to people who are unable to care for themselves at home. They must meet their states eligibility limits regarding income and assets, which differ depending on whether the resident is single or part of a married couple . They may reside in any level nursing home thats certified by Medicaid and that accepts Medicaid payment. Be aware, however, that some nursing homes only accept Medicaid payment for a limited number of residents.
Unlike Medicare coverage of nursing home care, theres no Medicaid requirement of a prior hospital stay, no restriction to skilled nursing facilities, and no requirement that the person need skilled nursing home care or still be recovering from an illness or injury in order for Medicaid to continue coverage. In other words, Medicaid unlike Medicare will cover residence in a nursing home purely to provide help with the nonmedical activities of daily living whats called custodial care.
Benefits Of Social Security
Social Security benefits are made as cash payments directly to the individual. There are no restrictions on how the payments can be spent. The average Social Security check for a widowed, unmarried, or otherwise single retiree, as of 2019, is $1,470 / month. If a senior begins collecting Social Security at the age of 62, the maximum benefit amount is $2,209 / month. The maximum amount for an individual who begins collecting at full retirement age is $2,861 / month. . However, one may delay social security payments up to age 70, and if so, the benefit amount will increase monthly up until the age of 70. As of 2019, $3,770 / month is the maximum benefit for someone who starts collecting benefits at age 70.
That being said, each individual receives a different amount depending on the amount and number of years paid into the system, as well as the age at which they began to receive benefits.
To begin receiving benefits, it can take between 1 – 3 months. Benefits start in the month following the month of entitlement. Entitlement means when an individual meets the minimum age requirement and completes the application. However, as mentioned above, it can take up to 3 months to start receiving checks.
National Council On Aging
The National Council on Aging, a private group, has a free service calledBenefitsCheckUp®. This service can help you find Federal and State benefit programs that may help your family. After providing some general information about the person who needs care, you can see a list of possible benefit programs to explore. These programs can help pay for prescription drugs, heating bills, housing, meal programs, and legal services. You dont have to give a name, address, or Social Security number to use this service.
To learn more about BenefitsCheckUp®, call 1-571-527-3900, or visit BenefitsCheckUp®.
Keeping Money Before A Nursing Home Conclusion
In answer to the question of how much money can you keep going into a nursing home and still have Medicaid pay for your care, the answer is about $2,000. Gifting your assets to someone else may not protect it and may incur penalties when applying to Medicaid. Before transferring your funds, you should speak with a lawyer familiar with Medicaid laws.
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