What Can You Really Afford to Lose to Nursing Home Costs and Alzheimer's Care?

Jackie Bedard
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When it comes to Medicaid, each state does things a little bit differently. However, every state decides on a maximum number of assets that can be kept in the event that there is a husband and wife, and only one of them needs long term care.

It's important to note that the rules are much more generous for a husband and wife, compared to a single individual who is applying for Medicaid. The federal government has established a maximum level of assets for husband and wife, the Community Spouse Resource Allowance, or CSRA. This is the amount of money that may be kept so that the healthy spouse can continue to live in the community. Medicaid refers to the spouse who is living at home as the "community spouse." Please feel free to call our office at (919)443-3035, and we can help you to determine your potential CSRA.

Any assets that exceed the CSRA must be spent down on the ill spouse's care. From the Medicaid department's point of view, the ill spouse is referred to as the "institutionalized spouse" or the IS. The IS can have a modest resource allowance as well. That is typically no more than $2,000 in assets (call our office for the exact number). The couple may not have any assets exceeding the CSRA or they will be ineligible for Medicaid. That includes your IRA's, your cash value life insurance, your CD's, your brokerage account, your checking account - you are obligated to pay until your resources reach the limit for our state, if those assets are classified as being available for spend down. Make sure you talk to an elder law attorney to see what you must spend down. We have seen many clients who have spent far more money than what was required to spend down at the time of the Medicaid application.

You may remember that previously, you learned that an irrevocable pre-paid burial policy is counted as unavailable. But the rules can be tricky. For example, say you have another life insurance product that you bought years ago, which has a face value (or a death benefit value) of $50,000. This same product has a cash value of $18,000. To the Medicaid department, that looks like $18,000 that you should cash in now to spend on your care. It doesn't really bother them that your survivor spouse would be much better off getting the $50,000 death benefit at some future time. Nope, if you can get your hands on that cash, regardless of the withdrawal penalty or its future value, the Medicaid department says you need to get it now so you can spend it on long term care. All this has to happen before you will ever become one of those "qualified individuals" who is eligible for long term care with a nursing home benefit paid by Medicaid.

Additional Information on North Carolina Medicaid Assistance for Nursing Home Care:

Download a free copy of Jackie Bedard’s book, The Ultimate Guide to Paying for Nursing Home Care in North Carolina, to learn the nursing home and Medicaid secrets you need to know to avoid going broke in a nursing home and leaving your family penniless.