Howard has been admitted to a nursing home, while his wife, Bess, continues to live in their home. Howard’s monthly income is $3,000 from Social Security and a small pension. Bess’s monthly income is $900 from Social Security. Will Howard’s income allow him to qualify for Medicaid?
Howard and Bess’s only assets are a home that is worth $475,000, a 2015 Prius worth about $15,000. They have prepaid pre-paid burial policy and a life insurance policy with a face value of $1,000. Their bank account, after paying monthly bills, has $1,200 in it. Does Howard meet the asset limitations to qualify for Medicaid?
The gross income of a Medicaid applicant must be less than $2,349 per month. However, only the income of the spouse seeking Medicaid is counted. If the applicant’s income exceeds $2,349, a qualified income trust known as the Miller Trust is needed.
Bess, as the spouse remaining at home is entitled to retain all her income and $2,316 of Howard’s income to bring hers to the Spousal Income Protection Allowance of $3,216 per month. This leaves $684.
Howard will be allowed a $60 allowance from the Miller Trust to use for incidental needs. Premiums for Howard’s Medicare Part B at $144.60 and his Part D at $39.40 (for prescription drugs) can be paid out of the Miller Trust. The remaining $440 a month goes to the nursing home. The balance of the cost of Howard’s nursing home care will be paid by Medicaid.
To qualify for Medicaid, the applicant must have countable resources of $2,000 or less. A home with equity up to $585,000 is excluded, so Howard’s home will not be a counted resource. One automobile of whatever value is not a countable resource. Personal property, such as furniture and other household items, are not countable. Neither are prepaid burial policies or life insurance policies worth $1,500 or less.
The only countable asset Howard has is the bank account holding $1,200. Therefore, his countable resources are within the Medicaid limitation.
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm handling probate of estates, wills, trusts and Medicaid planning in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.