As elder law attorneys, we advise clients that are concerned about potential long-term care costs. The majority of elders will need help with their activities of daily living, and a significant percentage of them will require paid care.
You can expect to pay over $125,000 for a year in a nursing home in the Burlington, Vermont area, and you are look at almost $70,000 for a professional home-health aide.
Almost all seniors qualify for Medicare coverage, and it is a solid source of health insurance all things considered. However, Medicare does not pay for long-term care, so you have to look elsewhere for assistance.
Medicaid has become the de facto source of long-term care insurance in this country because it will pay for long-term care. In fact, about 65 percent of seniors in nursing homes are Medicaid beneficiaries.
Medicaid Asset and Income Limits
There is a Medicaid asset limit of $2000, but some things that you probably own are not countable for Medicaid purposes. Your motor vehicle is not counted, and you can retain ownership of your wedding ring, your engagement ring, and your heirloom jewelry.
Furniture and other household items are exempt, along with personal belongings. An applicant can have unlimited term life insurance and $1500 worth of whole life insurance. The same amount can be saved for final expenses, and prepaid burial plots are exempt.
The most significant asset that is not counted is your home, but there is an equity limit of $603,000 in Vermont in 2021.
In half of the states, you can qualify if you contribute your income toward the cost of the care that is being received minus a small personal needs allowance, and Vermont is in this group.
However, you could convey assets into a Qualified Income Trust (sometimes called a Miller Trust) to meet the eligibility criteria.
Allowances for a Healthy Spouse
If you are married and your spouse is entering a nursing home while you can still living independently, you would be entitled to a Community Spouse Resource Allowance. This is half of the assets that count for Medicaid purposes, but there is a limit.
In Vermont in 2021, the limit is $130,380. In some states, there is a minimum that a healthy spouse can keep even if it is more than half of the total, but we are not in that group.
A healthy spouse can also qualify for a Monthly Maintenance Needs Allowance. This gives the person in question the ability to receive income that is earmarked for the spouse that is a nursing home resident. In 2021, the maximum allowance is $3259.50, and the minimum is $2155.
There is a solution when it comes to the assets that are countable, but you have to act in advance. You could convey resources into an irrevocable Medicaid trust, and you would not be able to access the principal, but you could receive distributions of the trust’s earnings.
Divestitures must be completed at least five years before you apply for Medicaid because there is a look-back period. You would be deemed ineligible if you violate this rule, so proactive planning is key.
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Need Help Now?
If you already know that it is time for you to work with an attorney to put a plan in place, we are here to help. You can schedule a consultation appointment if you call us at 802-879-7133, and you can fill out our contact form if you would prefer to send us a message.