There are a lot of people who envision having their elderly relatives living in a nursing home at some point, and many people are concerned about the cost of living in a nursing home. While many families enjoy caring for their relatives at home, there may come a time when they are no longer physically able to do so.

Due to advances in medical science and increased awareness of our health, we are living longer as a species than at any other time in our past. While our longer lifespans are a positive thing, it also means that we have a greater chance of contracting chronic illnesses that can lead to significant physical and mental disabilities as we get older. As these illnesses worsen, they may require care beyond what we can deliver at home, meaning that we need to look closer at a long-term care facility.

If you need to place a family member or loved one in a nursing home, the cost can be expensive. In Pennsylvania, it is not unusual for a family to spend more than $8,000 per month on nursing home care.

While there are health insurance plans, including Medicare, available, the coverage they offer for nursing home care is relatively limited. That is why you need to invest in long-term care insurance that can help you make a nursing home more affordable.

We would be happy to talk with you about your options so that you can limit your out-of-pocket expenses. Otherwise, you could watch your inheritance evaporate before you apply for Medicaid. Reach out to us to learn more about how we can help you with the cost of a nursing home.

Medicaid is a joint federal-state program begun in the 1960s to provide medical care, including nursing care, to those who cannot afford it. In Pennsylvania, Medicaid is termed Medical Assistance (MA) and is administered by the local county assistance offices of the Department of Human Services. The local county assistance office will review your resources and income to determine if you are eligible to receive benefits under the Medicaid Program.

Your financial resources can be no more than $2,400 (this level can be $8,000 depending on the applicants monthly income) to be eligible for Medicaid. This includes cash, stocks and bonds, bank accounts, your IRA and real estate that is not your principal residence. Also, if you transfer any financial resources to family or friends within three years of the date you apply for Medicaid, these will be counted as available resources and may affect your eligibility.

There are a number of resources that are not counted in determining your eligibility for Medicaid. These include your automobile, household goods, clothing, jewelry, a grave marker, a prepaid funeral, and your home if you state an intention to return to it after your nursing home stay, or it is used as the principal place of residence by your spouse or a dependent child.

After qualifying by showing your resources are down to $2,400, you will have to prove that your income is insufficient to pay for your nursing home care. Generally, all of your income, but not your spouse’s income, is counted. This includes pensions, Social Security, and interest and dividends from bank accounts and other investments. You are, however, permitted to keep $45 per month for personal expenses.

The above discussion of the Medicaid rules applies to a single person being admitted to a nursing home. If you are married and living at home with your spouse, different rules apply in determining your eligibility. Generally your spouse is permitted to keep his or her income and any qualified retirement funds. Also, your spouse is permitted to keep a portion of the resources owned by either of you, in addition to the resources mentioned above that are not counted in determining your eligibility for Medicaid. This amount is approximately one half of the couple’s non-exempt assets, with high and low limits which are subject to change annually.

In summary, this article attempts to give you an understanding of some of the rules that apply for Medicaid eligibility. It is not a comprehensive examination of Medicaid regulations pertaining to nursing home care. If admission to a nursing home is a potential future reality for you or a family member, you should consult your legal advisor now to plan properly.