Many people are under the impression that Medicare will cover all of their health care needs once they become eligible for coverage. If you have paid into the program sufficiently, you will qualify for Medicare when you reach the age of 65 under currently existing laws. Those who will qualify for Medicare often look upon Medicaid as being irrelevant.
Medicaid is a government health insurance program that is available to people with significant financial need. If you have never been poor and you will qualify for Medicare as a senior, you could logically assume that you will never need Medicaid coverage.
In fact, a very significant percentage of elders who were once qualified for Medicare ultimately seek Medicaid coverage. This is because Medicare will not pay for a stay in a nursing home or assisted living community, and it won’t pay for in-home custodial care.
It is impossible for most people to comfortably pay for long-term care out-of-pocket, because it is very expensive. The average annual charge for a private room in a nursing home exceeds $90,000.
Medicaid is a need-based program, so there are very strict asset and income limits. In most states, a single individual can have no more than $2000 in countable assets.
People typically qualify for Medicaid through a process called a Medicaid spend down. To implement a spend down, you give away or spend assets before you apply for Medicaid so you have limited resources in your own name.
Medicaid Monthly Maintenance Needs Allowance
When Medicaid is determining the eligibility of an applicant who is married, the healthy or community spouse who is remaining at home has certain rights. One of them is the right to a Medicaid monthly maintenance needs allowance if it is necessary.
The spouse who is entering a long-term care facility may be drawing income from Social Security, a pension, or from some other source. Under program rules, most of this income must go toward the long-term care costs.
However, if the community spouse is relying on some or all of the income to maintain a basic standard of living, he or she may continue to use the income. This is the monthly maintenance needs allowance.
Medicaid is a government run program that is jointly administered by the federal government along with each respective state. As such, states have some latitude with regard to the exact way that they implement the program, but there are federal guidelines.
In 2014, the maximum monthly maintenance needs allowance that a state may allow is $2931.
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In this post we have answered a single question about Medicaid. To learn more about this complicated program, download our special report.
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