As we get older, our medical needs grow and change with us. It is one of those facts of life that the older you get, the more medical misfortunes you seem to experience. But this shouldn’t and doesn’t mean that life can’t be filled with beautiful experiences, despite all that. We just end up needing a little more assistance than we did when we were younger.
This additional medical assistance does cost money, however, and this can be quite stressful. It is especially stressful for those individuals that don’t have a lot of financial resources at their disposal. One worry that many have is whether they will be able to keep their family home if one or both spouses have to go on Medicaid. Thankfully, there are systems in place that can help to protect the family home from loss, even as medical costs mount.
There are a lot of questions that people have when they start to consider Medicaid. For one, some people don’t realize that Medicaid and Medicare aren’t the same thing. Despite how close their names sound, they are different programs. Another thing people don’t really understand is what happens to a healthy spouse when their partner goes on Medicaid. Could they lose money, assets, or even their house? To clear this all up, we dive into each of these issues below.
What Exactly is Medicaid Compared to Medicare?
While Medicaid and Medicare sound the same, they really aren’t. Unfortunately, they sound similar. This is unfortunate only because it makes it much easier for somebody to confuse the two. This can mean that information you thought you heard about Medicaid was actually about Medicare or vice-versa.
So let’s quickly see what each of these is, so we know what it is that we are answering when we look at the question of what happens to your house if your spouse goes on Medicaid.
Medicare is a type of insurance program that the federal government administers. It is available to those over the age of 65, and it doesn’t have any imposed limitations regarding income level. Instead, those who are eligible may make payments of small monthly premiums or deductibles. It helps to cover the cost of medical care. It requires an individual to be an American citizen and have worked for at least ten years; it may also be granted to an individual if their spouse meets the criteria.
In contrast, Medicaid is an entitlement program that is funded by both the federal government and the state government. This means that Medicaid can have different requirements in each and every state. Access to Medicaid is also dependent upon an individual’s income level. In 2022, Arkansas limits eligibility to those who earn $2,523 or less in a month. There is also a limit on how much a person can own in assets and still be eligible, with $2,000 being the limit for single individuals and $3,000 being the limit for married individuals. Obviously, this concerns people who have a home that is worth more than these limits allow.
In Arkansas, you can use Medicaid to help pay for nursing home care, home-based services, community-based services, services for the aged blind, or care for disabled individuals. Keep in mind, again, that Medicaid will work differently in other states. So if you move, or if you have Medicaid in another state and moved to Arkansas, you may have to learn about the system all over again.
Am I About to Lose My House Because My Spouse Went on Medicaid?
Every state has some kind of program that is designed to help the state recover the cost of the Medicaid program. Medicaid offers care to those who are unable to afford it themselves, which means that only a portion of the costs could ever be recovered. In Arkansas, it is the Department of Human Services that would be tasked with recouping these costs.
When you or your spouse apply for Medicaid, part of the process is taking a snapshot of your finances and assets. The family home is not counted at this time, so its value doesn’t prevent you from being granted Medicaid. But when it comes time to recover costs through the Medicaid Estate Recovery Program, the house may be at risk. A house is often worth more than the rest of an estate, in these cases, so it can make sense that the government might want to seize the asset.
A house cannot be taken, however, if:
- You or your spouse continue to live in it
- You have an adult child who is blind or disabled, not necessarily living in the home and not necessarily a dependent
- Your spouse writes a letter about their intent to return home
- You have a child under the age of 21
Will My Spouse or I Lose Our Incomes?
This is a complicated question, as it depends on a lot of different factors. But to answer a complicated question with a general answer, you are more likely to keep your income while your spouse on Medicaid will only keep a small portion of theirs.
The best way to figure out what to expect from Medicaid is to consult a Medicaid planning attorney. There are quite a few resources available in Arkansas to help people meet Medicaid eligibility requirements. Unfortunately, these can be rather difficult to work with due to their complexity.
How Can I Get Help With My or My Spouse’s Medicaid Planning?
The best way to answer the questions above, such as how to protect your income or the family house, is to speak to and work with a estate planning attorney. Working with a professional attorney who spends their days helping people through these complex systems is one of the best investments you can make if all of this sounds too complicated to you.
While it is possible to get through all the paperwork and planning on your own, it certainly takes a lot longer to do it that way, and there’s always the possibility of getting something wrong. Even if you only work with a Medicaid planning attorney to go over your own planning, it is worth it to get a set of professional eyes double check your work. That way, if something is off, it is spotted before it becomes a problem.