Many married senior citizens in New Jersey are relying on Medicaid to pay for their medical and care needs once they are unable to take care of themselves on their own. However, they may be concerned that their assets will be depleted if one spouse needs to enter a nursing home, leaving the healthy spouse with nothing. However, it may be possible for the healthy spouse to keep certain assets, even if the other spouse applies for Medicaid funds to pay for nursing home care.
First, one needs to understand that if an individual is single and submits an application for Medicaid, that individual can only have $2,000 worth of assets or less. That being said, the situation for married couples is different. For these individuals, Medicaid will treat them as a single unit, meaning that Medicaid does not differentiate which spouse owns which assets. This means that the spouse seeking Medicaid benefits cannot merely give the other spouse nearly all their assets in order to be approved for benefits. However, there are exemptions to this rule.
One exemption is the couples main home (where they primarily reside, not vacation property), so long as one spouse is still living in the home. Another example is for a single automobile. Also, term life insurance policies are exempted if they do not have any cash worth.
In addition, Medicaid will look at the couple’s countable assets and split them 50/50. The spouse who is not applying for Medicaid (the healthy one) is called the community spouse and they are allowed to retain 50 percent of these assets, so long as they don’t exceed approximately $121,000 in value.
That being said, this still means that a couple may need to go through a Medicaid spend down in order to qualify for benefits, and they are still subject to the five-year look back rule. Therefore, when one spouse is applying for Medicaid benefits and the other is not, it may help to do so with the assistance of an attorney, who can help with Medicaid planning.
Source: nj.com, “Married and protecting assets from Medicaid,” Dec. 13, 2017