Paying for Nursing Home Care with Limited Income and Assets
Medicaid is a social welfare program that was created to help seniors and other individuals whose medical costs drastically affect their financial stability. If you think your loved one's medical bills (including nursing home fees, prescription coverage, doctor's visits and/or hospital stays) place them in this category, you should look into Medicaid coverage. To learn more, see our article about using Medicaid for nursing home care.
Medicaid is a federal and state-run program, so each state has different qualifying criteria, but generally, individuals may have no more than $2,000 of savings or liquid investments to be eligible. Also, those with a monthly income of less than $500 to $1,600 typically receive the most assistance paying for nursing home care. For more information about income and asset limits, see below.
Paying for Nursing Home Care with Excessive Income or Assets
As mentioned above, Medicaid was created for low-income seniors who suffer significant financial upset by mounting medical bills. If your loved one has enough income and/or assets to cover his own nursing home fees, you should consider saving tax payer money by helping him finance his long term care through private funds, Medicare and/or long term care insurance. But if your loved one has income or asset levels just over Medicaid's qualification level in your state, you can help him qualify by concentrating his assets on certain exempt belongings.
Medicaid determines a senior's income by adding up money received from the following sources:
- Social Security
- Interest and dividends from savings or investments
- Approximately half of a working spouse's income
Over 30 states currently have no limit on Medicaid recipient income levels. However, all those who qualify forfeit 100 percent of their income toward nursing home fees with the exception of small monthly stipends for "personal needs," money spent on Medicare premiums or non-covered medical expenses, and a small amount for home upkeep. So recipients with larger incomes might still receive help paying for nursing home care from Medicaid, but they will forfeit a greater amount of personal income toward their care as well.
Medicaid must get detailed information about an individual's assets in order to determine eligibility. Applicants with assets (savings, goods, effects, insurance policies, properties, etc.) exceeding $2,000 often do not qualify for Medicaid coverage of nursing home fees. However, the following assets are exempt from Medicaid's asset determination:
- Up to about $2,000 in savings or other liquid assets
- The value of a car up to $4,500
- Household and personal items (sometimes limited in value)
- One wedding and engagement ring of any value
- A burial plot worth up to $1,500
- A life insurance policy valued at $1,500
- Home equity of up to $500,000 or $750,000 depending on where you live
As you can see, your loved one's assets are severely limited if she wants help paying for nursing home care from Medicaid. However, she can make the most of her assets by investing more money into the exempt items listed above. For example, many seniors invest heavily in their homes and household goods as they age, preparing for Medicaid qualification. They also invest in wedding jewelry, an exempt asset that can be enjoyed, then passed on to future generations. Lowering Your Assets to Qualify for Help with Nursing Home Fees
Nursing Homes: Family Resources
- Nursing Home Care - Family Guide
- When To Talk About Nursing Homes
- When To Start Searching For Nursing Homes
- Finding Affordable Nursing Homes
- Choosing a Nursing Home
- Nursing Home Research Guide
- Finding a Nursing Home for a Couple
- Nursing Home Lists and Personalized Assistance