DLO / Monday, December 1, 2003 / Categories: Springfield Business Journal Article, Blog Post Medicaid Has Many Limitations In Providing Long Term Care An emerging area of the law today is "elder law." Elder law deals with issues that are of concern to older Americans, including medical care. One of the most common concerns is how to pay for long term care in a nursing home. Medicare, the federal insurance program that is available at age 65, does not cover nursing home costs, except for a limited period usually involving rehabilitation. For example, medicare may pay for 100 days of nursing home coverage following a stroke. Medicaid is a federal program administered by the states that is based on need. Medicaid will pay for long term nursing home costs if you qualify. Qualification is based on what you own (a resources test) and what you earn (an income test). In Illinois, the income test is not a set number. Rather, your monthly income must be less than your nursing home's monthly rate. Some nursing homes do not accept Medicaid patients, however, so you first need to determine if your preferred location is Medicaid certified. The resources test is much more complicated than the income test. When applying for Medicaid you will be required to complete a detailed application regarding your assets and your income. A single person is allowed to own the following assets and still qualify for Medicaid: (1) $2,000 in cash or other nonexempt property; (2) a home of any value; (3) one motor vehicle worth up to $4,500 if necessary for work, transportation for medical needs or otherwise; (4) life insurance or a revocable burial fund of up to $1,500; and (5) an irrevocable prepaid funeral plan up to $4,637. Your spouse's resources are counted in determining Medicaid eligibility. However, the spouse who is not in a nursing home is allowed to keep up to $90,660 in nonexempt property and up to $2,267 in monthly income. Although your home is exempt while you are alive and while your spouse is alive, it is not exempt after you are dead. While you are alive, the State of Illinois will place a lien on the home that must be satisfied after your death. If you do not meet the resources test, you must use your own assets to pay for your nursing home costs until you do meet the resources test. Alternatively, you may want to transfer your assets to your children or other family members. Because Medicaid is only intended for those who cannot pay for themselves, there is "look back" period if you give your assets to others. The Medicaid application asks if you have made any transfers. You must sign the application under penalties of perjury, and making false statements on the application is fraud. If you give assets to someone outright, there is a 36 month look back period. That is, any assets that you transferred within 36 months prior to applying for Medicaid will be counted as available resources. If you give assets in trust, the look back period is 60 months rather than 36. However, Illinois is considering applying the 60 month period to all transfers because of the significant and growing costs of the Medicaid program. Many people do not consider long term care until they need it. At that time there are not many options. If you are not yet elderly, now is the time to plan for your long term care. You may not qualify for Medicaid or you may simply feel more secure relying on your own long term care plan. Your plan may include long term care insurance, annuities, old fashioned savings or other options. Talk to your advisors and determine what is the best plan for you. Previous Article A Handshake Isn't Enough Today Next Article New Workplace Laws You Need To Know Print 631