What happens to your monthly income if you go into a nursing home?
Unfortunately, we face an increasing risk of spending some part of our lives living in a nursing home. Most of us now know how expensive nursing homes are, $90,000 a year or more, and we know that few people have the resources to pay this for long. Absent planning, what typically happens is that the person who moves into a nursing home quickly spends down all his or her assets, and then, once impoverished, is put on the Medicaid program. What most of us don’t know is what happens to one’s monthly Social Security and pension checks once the person uses up all of his or her assets.
The basic rule is that all your monthly income goes to the nursing home, and Medicaid then pays the nursing home the difference between your monthly income, and the amount that the nursing home is allowed under its Medicaid contract. The only exception that always applies is that Medicaid will allow you to keep the first $60 of your money each month to pay for your “Personal Needs,” such as the beauty shop, or postage stamps, or for the phone in your room.
Medicaid also allows a few other exceptions. You may be able to show that your income is needed by your spouse or a dependent child. You may need your income to pay off old medical bills. Or, if you will only be in the nursing home for a short period of time, you may need your income to pay the costs of keeping up your home or apartment while you are gone.
For example, if you are married and your spouse isn’t living in a nursing home, then part of your income can go to your spouse, providing he or she has limited income. For example, if your wife only receives $600 a month from Social Security, Medicaid will allow her to keep up to $1,292 of your income, to bring her up to $1,892 a month. If she has high housing or rental expenses, this might even be raised to $2,898 a month. Some of your monthly income can also be set aside if you have a minor child or a dependent adult child.
If you have existing unpaid medical bills, and go into a nursing home and receive Medicaid, the program may allow you to use some or all of your current monthly income to pay the old bills, rather than just to be paid over to the nursing home, providing you still owe these old medical bills and you meet a few other requirements.
Finally, you may be one of the fortunate people who go into a nursing home for a short period only, for rehabilitation. Providing your doctor will confirm that you will be able to move back to your home within six months, the Medicaid program may allow your monthly income to be used to pay your property taxes, utilities, mortgage or rent, rather than have to be paid to the nursing home.
As with any rule involving Medicaid and health care, these exceptions can be tricky to understand, or use. If this is ever a concern of yours, please contact us, and we’ll assist you in getting the help you need.