The phrase long-term care Medicaid includes Medicaid benefits in a variety of living environments. These would include, for example, assisted living communities, nursing homes and continuing care retirement communities (except the independent living part of the continuing care retirement community). Long-term care Medicaid is the benefit that pays for care in those communities and is a benefit that can ultimately be worth hundreds of thousands of dollars over the lifetime an individual who qualifies for it.
When one spouse needs Medicaid benefits in a long-term care setting and the other spouse is going to remain in the community there are certain rules that provide protections for the spouse who remains in the community, otherwise known as the community spouse, and requirements as to asset limits for the nursing home spouse, referred to by the law as the institutionalized spouse.
The institutionalized spouse has many of the same financial requirements as a single or unmarried person. That means he or she cannot have more than $2,000 in liquid assets but can have some other assets that Medicaid allows such as a prepaid funeral, life insurance up to a certain amount and some other, less common, exempt assets.
The community spouse, on the other hand, can have significantly more assets. It may not be everything the couple had to begin with but she is able to retain what can be significant money when her spouse needs Medicaid. To start the community spouse can keep one half of all of the marital assets up to a maximum amount set by the state of New Jersey on an annual basis. Right now that amount is $120,900. In addition, the community spouse can keep the primary residence, all of the household goods and furnishings, a car and certain other exempt resources. There are also some other very effective strategies available that could allow the community spouse to keep significantly more assets so this is something that must be explored further to maximize what the community spouse can keep.
In addition to financial eligibility requirements the institutional spouse must also be medically eligible for Medicaid benefits. In order to found medically eligible for Medicaid benefits the institutionalized spouse must require help with at least two activities of daily living as defined by Medicaid or be suffering from cognitive issues such as dementia.
If the institutionalized spouse is found to be eligible for Medicaid benefits the cost of long term care – i.e. assisted living or nursing home care – will be paid for by Medicaid. At the same time it is possible for the community spouse to keep a large part of the couple’s money and other property if long-term care planning or asset protection planning, also known as Medicaid planning, is done.