Justin, Last month my mom admitted my dad to a nursing home. Medicare has been covering the charges so far, but she just got word that his coverage would end on Friday. She was told she’d have to private pay until she spends down their money. She is so worried—can this be right? All they really have is a $200,000 IRA and a small checking account. – Debbie
Debbie, While it is accurate to say that your mother will have to private pay the nursing home charges until she does something to help your father qualify for financial assistance, there are two rules she needs to know to avoid making some costly mistakes in the process.
The first rule is that she cannot be forced to spend down all of their assets. In her case, approximately half of what you reported can be protected for her future needs. I have seen many cases where uninformed families have spent down far more than required just because they didn’t know how the process worked.
The second rule is that she doesn’t actually have to spend down even the unprotected half of their assets on nursing home care. While the rules do require her to reduce their assets by about half before they can get assistance, they can do so by spending on anything of benefit to either spouse, not just your father’s healthcare.
That means she could pay off debt, fix up the house, or trade up to a safer vehicle to speed up qualification for assistance. If they haven’t done so already, they could preplan and prepay for their funerals. Instead of (or in addition to) those ideas, there’s an exciting plan they could explore that involves something called a Medicaid Qualified Annuity. It could help them accomplish the spend down virtually overnight, without wasting a penny, while creating additional monthly income that your mother would get to keep.
Every week we help families in situations just like this qualify for financial assistance while saving as much of their hard-earned assets as possible. Call today and we’ll schedule a strategy session at no charge to explore options. Check out our website to learn more.