Jennifer R. Luitjens, Esq., CELA*
Even without the emotional stress of placing a loved one in a nursing home, the financial questions and concerns can be overwhelming. Regulations relating to public benefits are constantly changing and may be difficult to interpret, causing myths to emerge and circulate. This article will attempt to debunk some of those fictions.
Myth #1: Medicare will pay for my nursing home care.
Fact: Medicare is a federal insurance program available to those over age 65 and those are disabled. Medicare Part A may provide coverage of skilled nursing facility care up to a maximum of 100 days, following a minimum 72-hour stay in the hospital. Coverage after the first 20 days requires a co-payment, which may be covered by supplemental health insurance.
Myth #2: I can’t afford a nursing home.
Fact: While the average cost of a nursing home in Chittenden County may be about $250/day, the percentage of residents who privately pay is less than 20%. Medicaid is the pay source for over 60% of the residents, with Medicare slightly over 10% and long-term care insurance under 10%.
Myth #3: The state gets my house if I receive Medicaid benefits.
Fact: Long-term Medicaid (also known in Vermont as “Choices for Care”) is the state and federal health insurance program for individuals who both medically and financially qualify. Generally, your primary residence, if valued < $500,000, is not considered a countable asset when determining your eligibility. Although there may be some pay-back to the state after your death, recovery will also depend upon who else may have an interest in the property.
Myth #4: I am married, but my spouse’s assets are separate and safe.
Fact: If you privately pay, and your spouse doesn’t sign as a guaranteed payer, then the spouse may avoid contributing private funds towards your care. However, if you then seek to apply for public assistance, Medicaid considers ALL assets owned by each spouse, regardless of whose name appears on the asset. Furthermore, if you own assets with another person (e.g., a child), those assets will likely be counted as well.
Myth #5: I can give my assets away and become eligible for Medicaid.
Fact: There is a penalty for transferring assets without receiving any value in return, if the gift has occurred since February 2006 (there will be a 5-year cut-off date when we reach February 2011). The penalty doesn’t start to run until you are otherwise eligible for Medicaid, and there is a presumption that you made the gift to qualify for public benefits. For every $218 that you transfer, the current penalty is 1 day without benefits.
For more information about nursing homes and financial options, visit the following websites: www.dad.state.vt.us/ltcinfo/, http://ddas.vermont.gov/ddas-programs/programs-cfc/, www.medicare.gov, http://www.bishca.state.vt.us/HcaDiv/consumerpubs_healthcare/shopping_ltc_April2005.pdf.
Jennifer R. Luitjens is Certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation, a non-profit organization accredited by the ABA. She lives in Jericho and practices in South Burlington with the Jarrett Law Office. This article is for informational purposes only and is not intended to constitute comprehensive or specific legal advice. The author stresses the need to engage appropriate legal and financial professionals when devising your individual estate plan.