Louisiana Long Term Care Medicaid Planning Blog

Community Spouse Allowance Increased for Louisiana Married Couples

During 2010 and 2011, the amount of Countable Resources that a married couple could own to be eligible for Louisiana Long Term Care Medicaid if one of the spouses went into a nursing home (Institutionalized Spouse) and the other spouse continued to reside at home or in the community (Community Spouse) could not exceed $109,560.

For example, let's say Grandma and Grandpa own a home, a car, and they have $100,000 in the bank. If Grandpa goes in the nursing home and Grandma continues to live at home, Grandpa will be eligible for Medicaid so long as he meets all of the other eligibility requirements.

Today, new regulations were issued by the Louisiana Department of Health and Hospitals which increased this "Community Spouse Resource Allowance" from $109,560 to $113,640 for Medicaid applications in 2012. Click here to see the schedule.

While the home property is an exempt asset for Medicaid, it appears that there is a limit on the amount of equity in a home that is exempt. While I can't find a reference to Schedule Z-2300 anywhere else in the Medicaid Manual, it was revised to indicate that $525,000 in home equity is exempt for 2012 - up from $506,000 in 2011. Click here to see schedule Z-2300.

If you or your family have between $100,000 and $750,000 in assets you want to protect from nursing home expenses, and you want to avoid nursing home poverty, give us a call from anywhere in the state at 866-491-3884.

 

 

Warning: Know the Rule on Medicaid and Separate Property

I met with a fine gentleman this morning. He is married but he came in alone. He and his wife have a Separate Property Agreement, which basically means that they have no community property - what's his is his and what's hers is hers.

He and his wife's estates are about equal in value. He wants to get his assets out of his name so that if he needs to go in a nursing in five years or beyond, his assets will be protected for his children and grandchildren, and he will qualify for Medicaid.

I told him there was a particular Louisiana Medicaid Eligibility rule that was screaming inside of my head. As applied, if he goes into a nursing home in five years, his assets will be protected but his wife will be forced to sell her assets and consume the proceeds on HIS NURSING HOME CARE prior to his qualification for Louisiana Long Term Care Medicaid.

Medicaid disregards the fact that assets are separate property. Medicaid simply looks at the combined assets of both spouses when determining whether a married person qualifies for Louisiana Medicaid - EVEN IF ALL OF THE ASSETS ARE THE SEPARATE PROPERTY OF THE SPOUSE WHO IS NOT IN THE NURSING HOME.

Paul

Divorce May Be Only Option

Twice in the last two days I've talked to families that had identical issues. Both circumstances involved a married couple, and one spouse owning minimal assets was about to enter the nursing home. The other spouse lived in the community and had significant separate property. The wealth spouse did not want to spend his separate property on his wife who was poor and about to enter the nursing home.

I told the families of the poor spouses that they are in a bind because Medicaid counts the assets of both spouses before determining Medicaid eligibility for one spouse, even if the spouse who is not entering the nursing home has separate property and even if the couple signed a Marriage Contract prior to marriage.

I told the families - as crazy as it sounds - that divorce may be the only option for the sick/poor spouse, given that the other spouse who has separate property is refusing to pay for the care.

I find it odd that a spouse would refuse to pay for the care of his or her spouse, but I've run across this set of circumstances twice in the last two days. It can occur easily in the scenario of a second marriage for each spouse, particularly when the children don't want their parent spending money on the step-parent.

I may sound like a broken record - but plan early for a potential future long term care need.

Spousal Impoverishment Resource Standard Not Increased For 2010

When one spouse resides in a nursing home (the "institutionalized spouse") and one spouse resides in the community (the "community spouse"), the community spouse may own a limited amount of countable resources, such as bank accounts, investments, IRAs, annuities, etc.)

Every year until this year, the amount that the community spouse was entitled to own was adjusted upward for inflation. For example, in 2007, the Resource Standard was $101,640. In 2008, the Resource Standard was $104,400. In 2009, the Resource Standard was $109,560. For 2010 (at least through June 30, 2010), the Resource Standard remained at $109,560.

I've met with too many people lately who all sing the same tune, "I wish we did this five years ago." Those who plan ahead for potential Medicaid planning can be rewarded with continued control over their home and life savings, qualification for Medicaid, family harmony, and succession/probate avoidance.

Medicaid Planning is one of those areas where it costs dearly to procrastine. In fact it usually costs $5,000 to $10,000 for every month that you procrastinate.

Apply For Louisiana Medicaid (and get Denied) Before Moving Out of Louisiana Nursing Home

Was working with a nice family last week. Mom is in the nursing rehabilitating from some broken bones, and Dad is still living at home. The family is considering moving both Mom and Dad into an assisted living facility.

Once the rehab stint - being paid by Medicare and health insurance - is over, Mom will not qualify for Medicaid because their Countable Resources exceed the Community Spouse Resource Allowance of $109,540 for 2009.

Here's what Mom and Dad should do to proctect their assets: They should donate the minimal amount of assets to reduce  their countable resources to below $109,540. Then Mom should apply for Medicaid. Mom will not qualify because the prior transfer, but here is the catch. The penalty period that Medicaid assesses (a certain number of months) will start to run even if Mom subsequently moves out of the nursing home. A few months later when the penalty period expires, Mom can move back into the nursing home if necessary and she will qualify for Medicaid.

The key Louisiana Medicaid eligibility provision provides that once a penalty period begins to run, it continues until expiration.

If you have questions about Louisiana Long Term Care Medicaid Eligibility, you can:

1. Post a Comment to this Blog Post. I'll be notified of your comment and I can provide an answer/comment.
2. Send me an email at paul@rabalaislaw.com. Put in the subject line: NEED MEDICAID ELIGIBILITY HELP.
3. Call our law office at 225-329-2450. We help families all over this great state of Louisiana qualify for Louisiana Long Term Care Medicaid.

I sincerely hope I can help!

Paul Rabalais

Should a Louisiana Couple Divorce For Medicaid Planning Purposes?

I've been asked several times over the years, "Should we (or "my parents") get divorced to make it easier for one or both spouses to qualify for Louisiana Long Term Care Medicaid?

I've never condoned getting divorced to qualify for Medicaid, for two reasons:

1. Having a happily married couple go through a divorce for financial/Medicaid eligibility reasons is silly; and
2. It is easier for a married person to qualify for Medicaid than it is a single person.

A single person can own no more than $2,000 of countable resources and qualify for Medicaid. In 2009, a married couple can own $111,560 ($109,560 Community Spouse Resource Allowance plus $2,000 for Medicaid applicant) of Countable Resources if one spouse continues to live in the community while the Medicaid spouse is in an institution.

A single person - even if he or she qualifies for Medicaid - must use his or her monthly income on his or her own care. A married spouse who lives in the community may keep at least $2,739/month of the couple's monthly income as that spouse's "Spouse's Maintenance Needs."

It seems to me to make no sense - either emotionally or financially - for a married couple to get divorced for the sole purpose of having one or both spouses qualify for Louisiana Long Term Care Medicaid.

If you have questions about Medicaid planning in Louisiana, send me an email at paul@rabalaislaw.com(put Need Medicaid Help in subject line), call our Medicaid planning hot line at 866-491-3884, or even better - post a comment to this blog post so other can help you as well.

Paul Rabalais

Louisiana Spousal Impoverishment Medicaid Provisions

Most people think that they cannot qualify for Louisiana Long Term Care Medicaid unless they have less than $2,000 in countable resources - such as, money in the bank.

Most people don't realize, however, that the rules are different when a married person applies for Medicaid while their spouse still lives outside the nursing home.

The idea is that the spouse who still resides independently in the community (called the "Community Spouse") needs resources to live off of.

For the year 2009, the maximum amount of the couple's combined countable resources is $109,560. Note that Medicaid disregards whether these assets are community property or the separate property of EITHER spouse.

Example: Grandma has Alzheimer's and Grandpa is relatively healthy but he can no longer care for Grandma. Grandma is moving into the nursing home. Grandma and Grandpa's combined countable resources consist of stock valued at $40,000, and CDs and bank accounts that total $55,000. Grandma will qualify for Medicaid because their combined countable resources are below $109,560.

However if Grandpa later has to move into the nursing home, he will not qualify because if both spouses are in the nursing home, then the countable resource limit for the couple drops to $3,000.

If you want to know more about Louisiana Medicaid eligibility, feel free to post a Comment below, or send me an email at paul@rabalaislaw.com. I always enjoy getting and responding to your emails and comments. Until next time...

Paul Rabalais