Nursing Home Care is Expensive
Indiana Family & Social Services Administration (FSSA) reported that the state’s average monthly nursing home cost was $6,527 ($78,324 per year) as of July 1, 2018, and it has increased at an average inflation rate of just under 5% per year for at least the past 20 years. Actual nursing home, assisted living, and home healthcare costs vary by region and the kinds of services that patients require.
Medicare & Supplemental Insurance Fall Short
Medicare pays up to the first 100 days in a nursing home. Medicare only covers nursing home care if the patient was transferred to the nursing home after inpatient admission to a hospital through 3 midnights. Supplemental insurance usually depends on Medicare coverage.
Medicaid Pays Nursing Home Costs When Residents Cannot Pay
Medicaid is a state-administered federal healthcare payment system. FSSA manages Indiana’s Medicaid system. Medicaid helps older and disabled Hoosiers pay some of their healthcare expenses, but applicants must satisfy wealth and income requirements to qualify. Most Medicaid applicants must earn less gross income than $2,250 per month ($2,313 after December 31, 2018), but special trust plans can help some high-income applicants qualify. Resource rules depend on the applicant’s marital status.
Resource (Wealth) Limits
Medicaid pays an unmarried Indiana patient’s nursing home costs if the patient owns “resources” worth less than $2,000. Resources are nonexempt assets like money, life insurance, investments, land, and vehicles. Medicaid exempts some assets from the resource definition like pre-paid funerals, income-producing real estate, and household goods and personal effects.
Special Rules for Married People
Federal law protects a Medicaid applicant’s spouse (the “Community Spouse”) from impoverishment. The Community Spouse can keep the normal exempt assets, plus all real estate and one car as additional exempt assets.
If the couples’ total resource value is below a certain minimum value ($24,720 in 2018, and $25,284 in 2019), the spouse can keep all of the resources.
If the couple’s total resource value is more than the minimum and less than double the maximum value ($247,200 in 2018 and $252,840 in 2019), the Community Spouse can keep 1/2 of the resources.
If the couple’s total resource value is more than double the maximum value, the Community Spouse can only keep the maximum value ($123,600 in 2018 and $126,420 in 2019).
The couple must either spend excess resources or invest them in exempt assets. The couple will trigger transfer penalties if they give assets away or sell them for less than fair market value.
Transfer (Gift) Penalties
A transfer penalty is a Medicaid disqualification of an applicant for giving gifts or selling resources for bargain prices that took place within the preceding 5 years (the “Lookback Period”) before the application date. FSSA computes the penalty period by dividing the transfer value by Indiana’s average monthly nursing home cost. The scary thing about a transfer penalty is that it does not begin until the applicant needs nursing home care and has resources below the resource limit—yes, that’s right—sick, broke, and Medicaid disqualified!
We Can Help
Medicaid eligibility rules have complex wealth and income requirements. An experienced elder law attorney can make the Medicaid puzzle less frustrating. We have planned estates for more than 2 decades to reduce or avoid taxes, protect disabled beneficiaries, and protect assets from business liability and healthcare expenses. We help wrangle our clients’ finances and Medicaid applications to help them qualify for critical nursing home and home healthcare services.
Download and complete the fillable PDF intake form from this webpage, and then call us at 812-278-8777 or complete the Contact Us form at the bottom of this page to schedule an appointment. We will give you instructions for mailing or emailing the completed intake document and other supporting documents before the appointment.