sumlerc Posted September 2010
Medicaid and Retirement pension
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I have one parent in a nursing home and the other needing to go. I understand that Medicaid will take both S.S. checks but will my Dads small retirement pension of $476.00 be taken also? They have bits and pieces of ins. policies that after all these yrs they don't want them to lapse...therefore the retirement money will be needed to keep the polices in effect. Can they have any money in a savings account..is $2,000.00 too much?
Thank you for your helpful replies...I need them!
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For my mother all available monies (SS AND retirement) were garnished.
I am not about insurance policies, so talking to a lawyer is best. perhaps one of the legal (staff) experts will have more information and post soon.
Thank you!
However, life insurance policies may be considered a "countable asset" for Medicaid eligibility purposes.
If the total face value (in other words death benefit) of all policies owned is less than or equal to $2,500 then the cash value of the total of all policies is excluded. If the total death benefit of all policies exceeds $2,500 then the cash value of all policies is included in determining the asset test.
If both parents are receiving Medicaid benefits most states permit the couple to have only $3,000 in assets. The life insurance cash values, if countable, can be included in this number. If the cash values are higher than the $3,000, then they will have to be disposed of to the extent that they are "over-resourced".
I can appreciate wanting to maintain the policies but you may have no choice but to surrender them for cash. If you do this, I would suggest looking at a method to preserve the cash for their use while applying for and receiving Medicaid. Specifically, consider the use of a Personal Service Contract or Agreement or Supplemental Needs Trust. Of course, the cost involved in establishing these arrangements may not be worth the result.
Let me know what state you are in, the cash surrender value of the policies, the death benefit of the policies, and any outstanding loans, and perhaps I can guide you further.
You really need to make sure you have this straight before you apply. Applications are denied because of life insurance policies not being reported correctly as an asset.
I truly appreciate your help...it is so dis-heartening that their meager earnings and life insurance can prohibit them from receiving the long term care they desperately need at the age of 86 and 95!
We live in the state of Texas, there are 2 ins policies with death benefits of $3,000.00 each and cash values of $1,500.00 each. They have another ins policy with a death benefit of $5,000.00. I am now afraid that I have over stepped in taking the initiative of paying up their policies for 6 mos.
They have an outstanding c.c balance of $6,000.00 on one cc and 1,500.00 on another c.c.
Because of the recent sale of their car, we have been replacing much needed items for them, however we're having a dickens of a time maintaining a balance at or below $3,000.00
My mom really wants and needs the care of a nursing home but I fear she may now be denied because of "too much" ins.
I thank you in advance for your kind guidance.
Can the ins policies be cashed in and the money given to the nursing home so they can qualify for Medicaid? I'm really scared for my mom, she's home alone and we all will feel much more secure with her being in a nursing home with dad. I'm not trying to shirk my responsibilities, I'm trying to maintain a good quality of life for everyone concerned.
1. If mom is the only person applying for Medicaid, Community Spouse (CS) Impoverishment rules will apply. This means that Medicaid will look at the income and assets of the applicant and the spouse separately.
2. The spouse applying for Medicaid cannot have assets of over $2,000 nor income over $2,022 per month. The CS may retain all of the couple's assets above $2,000 up to $21,912 and one half the amount up to $109,560 in 2010.
3. Assets owned by the applicant spouse valued over $2,000 can be transferred to the CS without penalty.
4. If husband is owner of the policies and mom is going to apply for Medicaid, no problem.
5. If mom owns or is co-owner of the policies she can transfer ownership to her husband with no penalty.
6. Problem solved (for the near term, anyway).
IMPORTANT NOTE: If these policies are kept make sure that no one who is receiving Medicaid is a beneficiary!
Given the numbers you supplied, it may very well be that these policies will sustain themselves without further premium payment if dividends are directed to premium payment. Contact the respective insurance companies and ask for an "in force ledger" without further premium payments and dividends going to premium. That will show you how long the policies will last and what the benefits will be.
If you want dad to apply for Medicaid, too, then the policies will most likely have to be surrendered. Unless....
Do your parents have final expense plans in place? If not, or if the plans are inadequate for today's market, you could transfer the policies to an irrevocable funeral trust to pay for final expenses. Any funeral home should be able to help you with this transaction. The policies will then be exempt from Medicaid countability.
OR, you could cash the policies, have mom retain $2,000, have Dad retain $1,000 (or vice versa) and you can then open a $2,500 "burial account" at a bank for each of them. This should be a non-interest bearing account titled "Jane Doe Burial Account". You have now protected $8,000 worth of assets.
Of course, if you feel the cash would be more helpful right now, then by all means surrender the policies and take care of business.
Just remember....DOCUMENT ALL TRANSACTIONS.
Sorry but I made an error above with respect to the amount can be dedicated to "Burial Accounts". In Texas the allowed amount is $1,500. This must be coordinated with Irrevocable Funeral Arrangements if that will be part of the plan. A knowledgeable funeral director should know the rules. If not, go here and scroll down to "life insurance": http://www.dads.state.tx.us/handbooks/mepd/F/index.htm
http://www.dads.state.tx.us/
Texas has a very high minimum monthly maintenance allowance for the Community Spouse (CS). The CS, in this case your dad, is permitted to maintain a minimum monthly income of $2,739 in 2010. This means that if his income is below $2,739 he is entitled to receive your mother's income (including Social Security) to meet that monthly income. Essentially, the state will gave dad mom's Social Security to meet his needs and makes up the difference with the nursing home. Caveat: You have to ask for this income diversion when you apply!
Thank you so very much for your help.
My father William is in a nursing rehab center since last year.
He had setbacks with his health, that is why he is in there this long.
He is not going to be permanent there. My mother who passed away on March 5, 2012, before applied for medicaid for my father since they could not afford the rehab center's cost. Aetna medicare will not cover it. The medicaid went through this week but medicaid is saying that they want my father's social security and pension. I can see the social security, but the pension is used to keep his apartment running until he is able to return. Could you please advice me what to do?
That is just my layman's understanding. I hope that Ralph or another forum expert will pop back on and give you specific details.
Is she able to ask this on her own? Is someone else helping her handle her affairs, perhaps as POA?
Can spouse survivor pension benefits be garnished for long term care bills after the pensioner has died?
My question is what can I expect to keep for my rent and food, utility bills when I put him in a nursing home?
The spouse not applying for Medicaid benefits is called the Community Spouse.
The Community Spouse is permitted to retain all of his/her own income regardless of the amount and is guaranteed a minimum of the couple's combined income if their own income falls below $1,939 and can receive a maximum of $2,931 (in 2014).
The income the Community Spouse is able to retain when the other spouse in receiving Medicaid nursing home benefits is called the Monthly Maintenance Needs Allowance (MMNA) and varies by state.
Using Massachusetts specific numbers below you will be able calculate the amount you will be able to keep for your needs.
The formula is this:
Add your rent + $608 Utility allowance (state mandated). This equals your "Shelter Cost".
From your shelter cost subtract $582 (state mandated shelter allowance).
The result is your "excess shelter costs".
This is added to the minimum Monthly Maintenance Needs Allowance of $1,939.
The result is the amount you will retain (up to a maximum of $2,931).
Example:
Your rent is $1,200 + $608 Utility Allowance = $1,808.
$1,808 - $582 = $1,226.
$1,226 + $1,939 = $3,165
In this example you will be able to retain $2,931
I hope this answers your question.
7348bill, you are lucky because NJ is one of the few states that will cover ALF under Medicaid! It IS fair, because the state picks up the rest of the tab. We have many posters here in other states that wish they were in NJ
If he dies, the VA has many benefits for surviving spouses. Look them up at VA.gov. especially widow's pension and "aid and attendance"