How Much Will Medicaid Pay Towards a Nursing Home Stay?

How Much Will Medicaid Pay Towards a Nursing Home Stay?


When it comes to long-term care, many individuals and their families rely on Medicaid to help cover the costs. Medicaid is a joint federal and state program that provides health coverage to low-income individuals, including support for nursing home care. However, understanding how much Medicaid will pay towards a nursing home stay can be complex, and eligibility depends on several factors.

Medicaid Eligibility

Before delving into the specifics of how much Medicaid covers for nursing home care, it’s important to address Medicaid eligibility. To qualify for Medicaid assistance for long-term care, an individual must meet certain financial and medical criteria. These criteria typically include having limited income and assets. Medicaid’s rules and eligibility criteria may vary from state to state, so it’s essential to consult with an elder law attorney or a Medicaid expert for guidance specific to your situation.

Medicaid Coverage for Nursing Home Care

Medicaid provides significant assistance for nursing home care, covering a substantial portion of the costs. However, the exact amount Medicaid will pay towards a nursing home stay depends on several factors, including:

  1. State Variation: Medicaid is administered by individual states, and each state has its own rules and regulations. This means that the coverage and payment amounts can differ significantly from one state to another.
  2. Income and Assets: Medicaid eligibility is based on income and assets. Generally, the lower an individual’s income and assets, the more Medicaid will cover.
  3. Level of Care Needed: Medicaid covers different levels of care, ranging from basic custodial care to skilled nursing care. The level of care required will impact the amount Medicaid pays.
  4. Nursing Home Choice: Medicaid has specific regulations regarding which nursing homes it will cover. It’s essential to choose a nursing home that is Medicaid-certified to ensure coverage.
  5. Look-Back Period: Medicaid has a 5 year look-back period during which it assesses an applicant’s financial transactions to prevent asset transfers aimed at qualifying for Medicaid. Understanding these rules is crucial to avoid penalties.

Medicaid plays a vital role in helping individuals afford the high costs of nursing home care. However, determining how much Medicaid will pay towards a nursing home stay is a complex process that involves various factors, including income, assets, specific state regulations for where you live, and the level of care required.

To navigate these complexities successfully, it is highly recommended to consult with an experienced elder law attorney who can provide guidance and help you make informed decisions about long-term care planning while protecting your assets and financial well-being.

For more information, do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.


Contact Miller Estate and Elder Law

Remember, you are not alone, and seeking help is a sign of strength and dedication to your spouse’s well-being. Call us at (256) 251-2137 to discuss your legal needs, or get in touch with us by completing the brief form below.

Subscribe to Our Blog

Get the Facts: 10 Surprising Long-Term Care Statistics

Get the Facts: 10 Surprising Long-Term Care Statistics

older man nursing home resident sitting at dinner table with nurse smiling

When it comes to long-term care, many people are unaware of the potential costs, and the likelihood of needing such care in their lifetime. Planning in advance for long-term is crucial to safeguarding your assets and ensuring a financially secure future. Below, we’ll explore ten surprising long-term care statistics that highlight the importance of proactive planning.

1. Probability of Needing Long-Term Care

According to the Administration for Community Living (ACL), 70% of people aged 65 and older will require some form of long-term care in their lifetime. This statistic underscores the need for adequate preparation.

2. Average Length of Care

The average duration of long-term care is approximately three years. It’s essential to consider the potential financial and emotional impact of extended care needs.

3. Caregiving by Family Members

Family members provide the majority of long-term care, with around 83% of elder care being provided by unpaid family caregivers. This not only highlights the significant role that families play in the caregiving process, but also the lack of education around how to become a paid caregiver—yes, that IS an option!

4. The Rising Cost of Care

Long-term care costs are on the rise. The annual median cost for a private room in a nursing home is approximately $105,850 a year, while a home health aide costs around $56,056 per year. These expenses can deplete savings quickly if not planned for in advance.

5. Medicaid as a Primary Payer

Medicaid becomes the primary payer for long-term care services for many individuals. Around 62% of nursing home residents depend on Medicaid to cover their care costs. Medicaid has strict eligibility requirements, with a look-back period of 5-years. Once again, advanced planning is crucial in order to qualify for this government program—you may not need it now, but now IS the time to start planning.

6. Gender Disparity in Caregiving

Women tend to shoulder the majority of caregiving responsibilities. In fact, women are more likely to be informal caregivers, and provide care for longer durations compared to men.

7. Impact on Spousal Care

Approximately 75% of married seniors will require long-term care services, with the majority of care provided to a spouse. This emphasizes the need for spousal planning to protect both partners. Do you know what to do if your spouse needs nursing home care?

8. Informal Caregiver Burnout

The strain of caregiving can lead to caregiver burnout. Nearly 40% of caregivers for older adults experience significant psychological distress due to the demands of caregiving.

9. Limited Coverage by Health Insurance

Most health insurance plans, including Medicare, only cover a limited amount of long-term care costs, leaving individuals responsible for a substantial portion of their care expenses. Planning well in advance of needing care can help ensure you don’t lose your life savings to the nursing home.

10. Financial Impact on Families:

The cost of long-term care can pose a significant financial burden on families. It’s estimated that 15% of caregivers had to reduce their work hours or quit their jobs altogether to accommodate caregiving responsibilities. The good news is that many caregivers can qualify to receive compensation for their caregiving responsibilities—ask us about how you can become a paid caregiver in Alabama.

These surprising long-term care statistics should serve as a wake-up call for individuals and families who want to plan for and secure their future. Being proactive and exploring options like long-term care insurance, setting up a Medicaid Asset Protection Trust, or consulting with an elder law attorney can help protect your assets and ensure a secure future. By planning well in advance, you can alleviate financial stress and focus on providing the best possible care for yourself or your loved ones. Remember, the time to plan is now—and we can help!

If you or a loved one is getting close to nursing home age, contact us to learn your options, and get a plan in place for the future. Call (256) 251-2137 or contact us using the brief form below:

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

Subscribe to Our Blog

When to Form a Medicaid Asset Protection Trust

When to Form a Medicaid Asset Protection Trust

house shaped cookie cutter with lock and money

If you’ve been following our blog, you’ve learned that—with a little planning—even middle-class American homeowners can qualify for Medicaid coverage. You’ve started exploring your options, and maybe you’ve even heard of Medicaid Asset Protection Trusts. This powerful legal tool could help you gain the long-term care coverage you’ll likely need in old age…but the sooner you start planning, the better.

What You (Really) Need to Know About Medicaid Asset Protection Trusts

Medicaid Asset Protection Trusts (MAPT) are a special type of irrevocable trust designed to shield assets from being counted as part of your Medicaid eligibility determination. When properly designed, they allow you to transfer assets out of your name, and remove them from your personal ownership. On paper, you cease to be the owner of whatever you place in the trust, while still retaining certain benefits and some control over everything you’ve worked a lifetime to earn. The primary objective with a MAPT is to protect your life’s work from being depleted to pay for nursing home costs (which can be exorbitant).

How Medicaid Asset Protection Trusts Work

When a MAPT is created, the individual—known as the grantor—transfers assets into the trust. The grantor names a trustee (either a trusted loved one or professional advisor) to manage the trust and make distributions according to the trust’s terms, which you set. By transferring assets into the trust, you, the grantor, effectively surrender ownership, yet retain control by virtue of determining how the assets can and cannot be used. Since Medicaid has a look-back period of five years, all of this needs to happen far in advance of when you anticipate needing Medicaid coverage. This will help you avoid penalties.

When to Get Started on Your Medicaid Asset Protection Trust

There are two common situations in which you might need a MAPT:

  1. Planning for long-term care: If you anticipate the need for long-term care in the future, creating a MAPT early helps safeguard your assets and avoid penalties.
  2. Preserving family wealth: By establishing a trust, you protect your assets from being spent down to cover nursing home expenses, ensuring that your loved ones can inherit your wealth…and not the nursing home.

A Medicaid Asset Protection Trust provides a strategic means to protect your assets while ensuring you remain eligible for Medicaid benefits. By transferring your assets into this type of irrevocable trust, you safeguard your life’s work for your family’s future benefit, while making sure you have access to the care you need. If you’re considering establishing a MAPT, it’s important to work with an experienced estate planning attorney who can steer you clear of pitfalls and penalties that are otherwise hard to avoid.

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

Subscribe to Our Blog

Estate Planning for the Sandwich Generation: Protecting Your Family While Caring for Aging Parents

Estate Planning for the Sandwich Generation: Protecting Your Family While Caring for Aging Parents

sandwiches on plate

The “Sandwich Generation” is a term coined to describe those who are caring for aging parents, as well as for their own children. Thanks to longer life spans and the fact that young couples are waiting longer to have children, an increasing number of people in their 40s and 50s are finding themselves challenged with these dual responsibilities.

Needless to say, having to look after two different generations of loved ones can present unique challenges, especially when it comes to estate planning and long-term care planning. Never mind the care and attention your parents and children need, the amount of time, energy and resources required to maintain this tricky balance can leave you unprepared for your own retirement and old age.

Luckily, there are a few steps you can take to balance your caretaking priorities, while also preparing for your own future.

Considerations for the Sandwich Generation

  1. First, make sure your own affairs are in order. Before you can provide for the needs of your parents, you first have to take care of yourself. Take a look at your finances to see what you’re working with. Make a list of all your assets and expenses, and determine how much money you can set aside for old age and retirement. Then, work with an estate planning attorney to ensure you have the proper documents in place to protect your family, your future, and your legacy.
  2. Assess the extent of your parent’s needs. Next, take an honest look at the physical, economic, and social health of your parents, and determine how much assistance they’ll need in the coming years. Some areas to consider in making your assessment are cognitive health, home safety, mobility, social interaction, and medical needs.
  3. Have “The Talk” with your parents. In many ways, this can be the hardest part, but it is important to involve your parents in the process, so they don’t feel like you’re making decisions about their future without any input on their part. It is important that you assure your parents that you’re not trying to take away their independence, and to remind them that you are helping to provide for both yourself and your children.
  4. Consider whether a conservatorship or guardianship is necessary for your parents. If your parents are suffering from dementia or another cognitive impairment, it may be necessary to make special arrangements for their well-being. Conservatorship and guardianship are two helpful options for managing this difficult situation. In these arrangements, a court appoints a person to make decisions about your parent’s care and property, whether that person is you or someone else. Establishing conservatorship or guardianship can be a lengthy legal process, and you will need to hire an estate planning attorney to help you navigate the process. If your parents are still healthy and cognizant, make sure to speak with an elder law attorney, as having the right documents in place now can save time, money, and a length court process trying to navigate conservatorship or guardianship later.
  5. Provide for your children. With all the focus on your parents, it can be easy to lose sight of protecting your children’s needs, both emotionally and financially.

It can be a difficult balancing act providing for two generations with vastly different needs, but you need not go it alone. An experienced estate planning attorney can assist you throughout all stages of this trying but important process.

At Miller Estate and Elder Law, we have many years of experience helping members of the Sandwich Generation navigate the complexities of their many responsibilities. Having the right legal documents in place now can save you from a major headache later. Contact us today to get started providing for your and your family’s future, or download our free guide, Caring for Aging Parents. Complete the brief form below to get your FREE guide today!

Subscribe to Our Blog

Medicaid Eligibility: How Can I Protect My Assets if I’m Already in a Nursing Home?

Medicaid Eligibility: How Can I Protect My Assets if I’m Already in a Nursing Home?

Moving into a nursing home is not only an incredibly stressful process, but it is extremely costly, too. Unless you’ve been carrying long-term care insurance, you are probably going to end up paying the costs of the nursing home care out-of-pocket until you qualify for Medicaid. When paying out-of-pocket, most people find themselves quickly running through their life savings…and their loved ones’ inheritances.

Because the need for long-term nursing care can arise unexpectedly, it’s preferable to plan for this situation well in advance. By spending down your assets throughout your lifetime—in advance of Medicaid’s 5-year lookback period—and establishing asset protection trusts, you can help ensure that you will qualify for Medicaid when the time comes. If you find yourself facing an unexpected nursing home stay, however, and you haven’t made the proper preparations, Medicaid crisis planning can help. You don’t have to lose everything you’ve worked a lifetime to accrue…

How to Protect Your Assets and Qualify for Medicaid

Medicaid eligibility is based on two factors: the assets you own, and your income. Because Medicaid only covers nursing home stays when a person doesn’t have any other resources, estate planning professionals recommend that you “spend down” your assets gradually over your lifetime. This process allows you to place your assets in trusts or other estate planning vehicles so they are protected—while still allowing you to qualify for Medicaid.

One mistake that many people make when faced with Medicaid eligibility is to give away or sell off their assets all at once. It is easy to panic when you find yourself faced with a nursing home stay, and the sudden need to qualify for Medicaid. However, when you apply for Medicaid, your financial transactions over the past 60 months are scrutinized, and—if you have given away your assets too readily— Medicaid will hit you with a sizeable penalty.

Another mistake people make is to convert exempt resources into countable resources. Your house and car are exempt resources and will not count towards your Medicaid eligibility. If, however, you sell these resources, the money you receive does count, and will be wasted paying the nursing home before Medicaid will step in to cover the costs.

Medicaid Crisis Planning

While it’s far preferable to plan for all possibilities well in advance, if you suddenly find yourself or a loved one facing a nursing home stay, it is still possible to hold on to at least some of your assets. Medicaid crisis planning, a process which allows you to quickly qualify for Medicaid, can be an extremely helpful option. It is important that you speak with a professional estate and elder law attorney before you make any moves that may put your assets—and your long-term healthcare—in jeopardy.

At Miller Estate and Elder Law, we have years of experience working with families facing a nursing home crisis situation. Contact us today using the brief form below to get started on devising a plan to protect your hard-earned assets, whether you are already in the nursing home, will need nursing home care soon, or are (hopefully) many years away from needing long-term care.

Feel free to contact our office with questions. You can also download a free copy of The Basics of Estate Planning in Alabama, or attend one of our upcoming free workshops.

If you need more guidance, we are happy to help. Contact us using the brief form below.

Subscribe to Our Blog

Medicaid Income Limits: Will Medicaid Take My Home?

Medicaid Income Limits: Will Medicaid Take My Home?

Many people worry about what will happen if their spouse needs to go to the nursing home. Will Medicaid take the home where so many of their memories were made? What about their car? Investment accounts? Their life savings? While it’s true that Medicaid income and asset limits are strict, with proper planning and an understanding of Medicaid eligibility requirements, most couples can avoid losing their hard-earned assets to the nursing home.

In Alabama, the average cost of nursing home care is $6,459/month—and this number is expected to increase to $11,648 by the year 2038. Medicaid will pay the cost of long-term care for those who meet income and asset eligibility requirements. If you are married, in order to qualify for Medicaid, the individual who needs nursing home care cannot have monthly income in excess of $2,523, and cannot own assets valuing more than $2,000. The spouse who doesn’t need nursing home care—known as the “community spouse”—can keep one half of their assets, valuing no more than $137,400.

Fortunately, for married couples, Medicaid does not include the marital home towards the asset limit. The community spouse can continue to live there. However, if they eventually need long-term nursing care, Medicaid will put a lien on the house for the amount of money they pay for your care, and your children may not be able to inherit the home.

That being said, you have worked a lifetime to accumulate your wealth and assets, and passing them down to your children and grandchildren is important. There are some strategies that can help you comply with Medicaid income limits, without making costly mistakes that could disqualify you:

1. Asset Protection Trusts. These trusts, when drafted and funded properly, transfer the ownership of assets from you to the trust. This means they are protected from Medicaid, and other creditors and predators. However, keep in mind that Medicaid will look back 5-years from the date of application—any assets transferred during that period can incur penalties.

2. Income Trusts. Qualified or Pooled Income Trusts can hold income in excess of the $2,323/month limit imposed by Medicaid.

3. Medicaid Compliant Annuities or Promissory Notes. This can be helpful to offset the cost of nursing home care if a penalty period is inflicted. While planning ahead is obviously a better choice, if you find yourself in a crisis where nursing home care becomes necessary on short notice, this strategy can save you and your heirs money.

4. Spend Down Assets in Compliance with the Look-Back Period. The following purchases and investments will not violate the 60-month look-back period:

a. Pay off accrued debt
b. Purchase medical devices, like wheelchairs, dentures, eyeglasses and hearing aids, etc.
c. Home modifications and renovations
d. Vehicle repairs
e. Create a formal life care agreement with the help of an attorney
f. Pre-pay for your funeral

To qualify for Medicaid, it’s imperative that you avoid certain mistakes—and some of them are not so obvious. Working with a qualified elder law attorney who understands Medicaid income limits and eligibility requirements, as well as how to structure a trust to protect your assets while increasing your chances of qualifying for Medicaid, is so important.

Attorney Bill Miller of Miller Estate and Elder Law is an experienced elder law attorney, with offices in Birmingham and Anniston, AL. Gain access to his free 20-minute webinar about Medicaid qualification by following the link below, or contact us via the website today.

Subscribe to Our Blog