When you start to think about the eventualities that you may face when you reach an advanced age, nursing home care will be part of the equation. It is logical to assume that Medicare will cover this type of care, but in fact, this is not the case at all.
According to the state, the average cost of nursing home care Vermont is over $10,000 a month. The average length of stay is one year, and 13 percent of people that receive paid care require the assistance for more than five years.
A married couple may face two separate sets of nursing home bills, so we are talking about a lot of money. Fortunately, there is a solution in the form of Medicaid.
2021 Vermont Medicaid Asset Limit
Since Medicaid is a health insurance program for people with sparse financial resources, there is a low asset limit. It stands at $2000 for a single person and $130,380 for a married couple in Vermont in 2021, and this limit has remained consistent for many years.
In fact, this is the asset limit in the vast majority of states in the union. Since it is a jointly administered state/federal program, the general guidelines are handed down by the federal government, so you see a lot of consistency among the states.
Assets That Don’t Count
The $2000 figure is a bit daunting, but the good news is that there are non-countable assets. The most significant one is your home, but there is an equity limit. It stands at $603,000 in Vermont during the current calendar year.
One motor vehicle is not counted, and appliances, furniture, other household items, and personal belongings are not countable assets. You can qualify if you are in possession of your wedding and engagement rings and heirloom jewelry.
Medicaid is perfectly okay with people being able to cover their own final expenses, so prepaid burial plots are exempt. You can have $1500 saved to help cover your funeral costs, and the same amount of whole life is allowed along with unlimited term life insurance.
Medicaid Estate Recovery
Before you get too comfortable with the idea that you can qualify as a homeowner, you should be aware of the Medicaid estate recovery mandate. If you are a Medicaid beneficiary, the program is required to seek reimbursement from your estate after your passing.
Because of the asset limit, your home is the only thing of significant value that they could potentially take. If you are in possession of your home at the time of your death, a lien could be placed on the property. However, with the right Estate Planning tools we can protect your house so this does not happen.
Spending Down and the Five-Year Look Back Period
It would be great if you could divest yourself of assets immediately after you find out that you need long-term care, but it is not that simple. There is a five-year look back period, so you have to complete all divestitures at least five years before you apply.
In addition to direct gift giving to loved ones, you could go another direction. The principal in a Medicaid trust would not count if you apply for eligibility, and you could receive distributions of the earnings until you do so.
What happens if you violate this five-year look back rule? Your eligibility is delayed, and the period of ineligibility would be based on a simple formula.
During the current calendar year, the state is using the figure of $10,148.35 to calculate the penalty. This is the average cost for a month in a nursing home. You would be ineligible for one month for every $10,148.35 that transfer within the five-year period.
Schedule a Nursing Home Asset Protection Consultation!
All of this can sound a bit intimidating, and this is understandable, but this is our area of expertise. We can gain an understanding of your financial situation and your family dynamic and help you devise a nursing home asset protection plan that will cover all your bases.
If you are ready to get started, you can schedule a consultation with one of our Burlington, Vermont estate planning lawyers if you call us at 802-879-7133. There is also a contact form on this site you can use if you would prefer to send us a message.