Long-term assisted living or nursing home care can be one of the most burdensome expenses that a family can endure. The question of how to finance nursing home care is best addressed well in advance. When facing the expense of nursing home care, there are a variety of options available to individuals and families.
Medicaid for Nursing Home Care
Medicaid is the largest source of nursing home care financing in Texas. Without long-term care insurance, staying in a nursing home, for even a few months will exhaust the resources most families. Thus for many, the nursing home Medicaid program is a vital lifeline. However, the program enforces strict guidelines as to income eligibility and other qualifying requirements. As of 2021, the Medicaid income cap was $2,382.00 monthly. Additionally, there is a limit of $2,000 on the countable assets a person may own. Certain assets are exempted from Medicaid's asset value limits. The most important of these asset exemptions is for your primary residence. A variety of other exceptions and provisions are available to ease Medicaid eligibility, especially when only one spouse needs nursing home care. Thus, expert assistance in applying for Medicaid benefits will ensure that you do not misrepresent your income, your assets, or that you fail to take advantage of the exceptions to the eligibility requirements that may be available to you.
Qualifying for Medicaid: Miller Trust
A Miller Trust, or Qualifying Income Trust, is an instrument designed specifically to allow a person whose income is more than the Medicaid limit, but not enough to pay for care, qualify for nursing home Medicaid benefits. Some or all of a person's monthly income is placed in the Miller Trust. Some of the funds in the Miller Trust may be payable to the spouse staying at home, depending on some complex calculations based on a couple's income and assets. The remainder will be paid to the nursing home along with any supplemental health insurance a person has. Only a licensed attorney can legally create a Miller Trust. Beware of non-attorney "Medicaid planners" who disregard this rule.
Qualifying for Medicaid: Special Needs Trusts
When a person under the age of 65 meets the Social Security Administration's criteria for disability, a Special Needs Trust, or Supplemental Needs Trust, may be established. This type of trust allows the trustee to use the funds and assets placed in the trust to provide additional care for the trust beneficiary. However, because the trust is used and properly structured, the trust's beneficiary can still receive nursing home Medicaid benefits. A special needs trust can be established by the person's parent, grandparent, legal guardian, a court, or by the person him- or herself. When the special needs trust is created using a person's own assets, the trust instrument must require that the remaining funds in the trust after the person's death go to the State to pay it back for Medicaid benefits.
Qualifying for Medicaid: The Right Estate Plan
It is important to have the right estate plan in place prior to the time a person needs nursing home care. Often by that point, the patient is no longer able to sign the documents he or she needs to sign to create a proper Medicaid plan. In particular, everyone should have a durable power of attorney in place and a medical power of attorney. The durable power of attorney should specifically include the powers needed to make a Medicaid plan. Most forms found on the internet do not have these specific powers.
Other Ways to Fund Nursing Home Care
There are several other ways to pay for nursing home care.
Medicare Benefits for Nursing Home Care
A less long-term option is for financing through the Medicare program. Medicare benefits are intended for short-term nursing home care needs. Patients receiving care for 20 days or less are well-suited for Medicare assistance. After that period, patients must contribute a portion of the cost per day for nursing home or convalescent care. Supplemental Medicare Insurance that increases the financial assistance benefit for another 80 days is available, but no Medicare benefit is available after 100 days—with limited exceptions.
Veterans Aid for Nursing Home Care
Veterans who have served during war-time are eligible for what is known as the Aid and Attendance Benefit. Veterans who require the assistance of others in the performance of their daily activities are eligible for this long-term care assistance benefit. The Aid and Attendance benefit is means-tested, as is Medicaid. Income eligibility is more constrained than Medicaid is, in fact. However, the benefit can be used to finance nursing home care. Texas state VA homes offer a further alternative to veterans of every sort. Each home will have its own eligibility requirements and application process. Space is always limited.
Long-Term Care Insurance
Long-term care insurance, like estate planning, is a measure taken in advance of the need for nursing home care. When implemented, long-term care insurance can cover a significant portion of nursing home care expenses. Additionally, long-term care insurance can pay for assisted living, which Medicaid will not pay for in most instances. Most of the time, premiums for long-term care insurance policies escalate with advancing age. This places long-term care insurance beyond the range of affordability for those already considering the likelihood or inevitability of nursing home care.
It is highly beneficial to work with an experienced Texas elder care attorney when investigating the best source of nursing home care financing available. Particularly with regard to Medicaid benefits, you will want to be sure you've taken advantage of every eligibility exception available.
Contact us to discuss your long-term nursing home care.