Deliberately reducing a person’s income and savings to qualify for Medicaid can sound daunting. But without planning, the high cost of long-term care can quickly drain savings anyway. Assisted living and nursing home care can cost thousands of dollars a month, often forcing families to exhaust their resources before qualifying for assistance.
“There’s a reasonably high likelihood that you’ll need nursing care for a period of their lives, and there’s a good chance you may need it for a long period of time,” said Eric Carlson, director of long-term services and supports advocacy with Justice in Aging, a national nonprofit legal advocacy organization focused on older Americans. Carlson has worked on these issues for 35 years.
Medicaid eligibility for long-term or skilled nursing care is generally limited to people with low incomes and minimal assets, though the exact thresholds vary by state. In most states, an individual must have monthly income below $2,800 to $3,000 a month. A person can have no more than in $2,000 in assets for an individual, excluding certain property such as a primary residence, a vehicle and personal belongings.
“People shouldn’t be doing ‘do it yourself’ financial planning in these matters. It can create significant problems with a person’s estate,” Carlson said. “You don’t want to wait until the day nursing care is absolutely necessary to make these sorts of decisions.”
