When seniors and families start thinking about long-term care planning, a number of questions arise. Some of the questions arise from common misconceptions about elder law issues or Medicaid. These misconceptions are worth revisiting to debunk them once and for all.
Myth 1: Medicare will cover my nursing home expenses. Medicare will pay some costs associated with a patient’s first 100 days in a nursing home following a hospitalization of 3 or more days. However, Medicare does not cover long-term care in a nursing home. Families often rely on long-term care insurance or pay privately for nursing home care before they can qualify for Medicaid.
Myth 2: I have to spend all my assets to be eligible for Medicaid. Families may choose to spend all of their assets on care. Elder law attorneys determine the best approach for each family by considering the needs of any at-home spouse, the amount of time available to plan, the family’s goals, and the types of assets. By using tools like trusts and annuities, families can preserve assets and still qualify for Medicaid.
Myth 3: I need to give my house to my children to protect it. Transferring a house to children could create some unintended tax consequences for the children. More importantly, the transfer and the timing of the transfer could be viewed by Medicaid as a gift, creating a Medicaid penalty on the amount gifted. Often, the better solution is to transfer the home into a trust or explore the possibility of selling an interest in the home to a child.
Myth 4: My husband needs nursing home care, so Medicaid only needs to know about his assets. The truth is that Medicaid will examine all assets of a married couple even if those assets are individually owned and even if there is a pre-nuptial agreement in place.
Myth 9: If one spouse goes to a nursing home, all of that spouse’s income goes to the nursing home. In North Carolina, a spouse who enters a nursing home may currently keep up to $30 as a monthly personal needs allowance, and the rest could be spent on care. However, the law allows a spouse at home to receive between $2,002.50 and $3,022.50 as a spousal allowance. If the at-home spouse does not earn income within these figures, then the institutionalized spouse’s income can be used to supplement the at-home spouse’s income.
As families begin planning for long-term care and end of life matters, consult an elder law attorney to help navigate the laws and to avoid common pitfalls.