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2019 update on Medicaid income and asset limits

It is further into the year than usual for this post, but we do aim for a yearly update to keep accurate numbers on our site. While many aging parents never see themselves spending time in a skilled nursing facility, the reality is that longer lifespans increase the odds that extra care will be required at some point.

The cost of private assisted living or memory loss care may be more than a loved one can afford. Even families who have the financial resources to pay for private care should look ahead. Advance planning should occur long before skilled nursing care is needed. This is because gifts made within five years of applying for Medicaid assistance are scrutinized.

The average age additional care is required

This will shock some, but it is 79. Additional care does not necessarily mean a nursing home; it could be an assisted living facility, memory loss unit or in-home care -- which means that 70 might not truly be the new 50. The costs for assisted living and memory loss, in particular, in the Denver area exceed national averages and can run $5,000 per month or more.

What is the difference between what Medicare and Medicaid cover? Medicare generally covers the emergency portion of treatment. After treatment plateaus (for example, when one moves to a rehabilitation facility) or there is a diagnosis that does not require skilled care, Medicare stops paying. Then, based on eligibility requirements, Medicaid may step in to cover long-term custodial care.

Eligibility update and forecast

In 2019, the income limit increased slightly to $2,313 per month for a single person ($4,626 per month for couples). This threshold continues a slow climb, but when planning out to the future, it may be prudent to use this yearly figure rather than forecasting a higher number.

For another year, the nonexempt asset limit - these are savings and checking accounts, stocks, investments and a second home or cabin - remains $2,000 for an individual/$3,000 for a couple. Much change is unlikely, so come up with a plan to handle cash flow issues.

Exemptions (and these are important) include:

  • Personal belongings
  • Household furnishings
  • Home equity up to $585,000 (2019)
  • A vehicle that meets certain conditions (for example, handicapped-equipped or used to get to medical appointments)
  • Irrevocable burial trusts

Purchasing a vehicle or doing necessary projects on a home could shift funds into the exempt category. This comes with a caveat to seek sound legal counsel to avoid mistakes that could trigger unintended consequences.

When only one spouse needs added care

Another exception exists called the Community Spouse Resource Allowance (CSRA). This lets the nonapplicant spouse keep up to $126,420 of joint countable assets as of 2019, an increase from a cap of $123,600 last year.

It is important to understand the Medicaid recovery statutes and how they could affect what you can leave to loved ones. Work with an experienced elder law attorney to avoid costly mistakes that might deplete your estate.

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