Fong Law Group

Medicaid Applicants: Protecting Your Healthy Spouse in 2025

For millions of seniors nationwide, Medicaid provides a safety net for people who find themselves requiring long-term care. Most Americans aged 65 and older – roughly 70 percent – will need these kinds of services in their later years, according to research. Meanwhile, the cost of long-term care has been rising with every passing year. In 2023, the national median cost for a semi-private room in a nursing home reached nearly $9,000 a month.

Medicaid Coverage

Run jointly by the federal and state governments, Medicaid – which sometimes goes by other names, depending on your state – provides health insurance to low-income populations. If you need to seek Medicaid coverage for long-term care, you may be aware that you must meet strict income and resources limits to qualify. In most states, you cannot have more than $2,000 in “countable” assets to your name to receive these benefits.

So, what happens if you are married? Does your healthy spouse have no choice but to live in poverty? Fortunately, no – states permit the healthy spouses of Medicaid applicants to retain a certain amount in resources to protect them from becoming impoverished.

Community Spouse Resource Allowance for 2025

Each year, the Centers for Medicare & Medicaid Services (CMS) issues updated Community Spouse Resource Allowance (CSRA) figures. These CMS guidelines outline how much of the couple’s assets the healthy spouse can keep while their Medicaid spouse gets the long-term care support they need. Generally, the CSRA increases each year.

Starting January 1, 2025, a spouse who lives at home while their partner receives Medicaid long-term care benefits can retain up to $157,920 in assets (an increase from $154,140 in 2024). Some states apply a maximum CSRA as well as a minimum CSRA. Under federal law, the minimum CSRA in 2025 will be $31,584. State Medicaid programs can then set their own limits within these federal guidelines.

Monthly Maintenance Needs Allowance for 2025

If you receive long-term care benefits through Medicaid while your healthy spouse continues residing at home, you may feel better knowing that your partner can also keep a minimum amount of income each month. The federal government calls this their monthly maintenance needs allowance (MMNA). In 2025, the maximum MMNA will be $3,948 (an increase from $3,853.50 in 2024).

Work With an Elder Law Attorney

The rules for Medicaid can quickly become complex and often vary widely by state. To ensure that you are pursuing the best coverage options for your situation, speak with a qualified elder law attorney in your area.

Promissory Notes and Medicaid Planning

Medicaid planning is often a complex process aimed at preserving a person’s assets while qualifying for Medicaid benefits. Finding a way to pay for long-term care costs without depleting all your hard-earned assets is a key part of Medicaid planning.

One strategy for protecting assets and qualifying for Medicaid that has gained attention in recent years is the use of promissory notes. This article will provide an explanation of promissory notes in the context of Medicaid planning, including their purpose, legality, implications, and considerations. Note that not all states allow promissory notes. Consult with an experienced elder law attorney before using one.

What Are Promissory Notes?

A promissory note is a legally binding document that outlines the terms of a loan agreement between two parties: the lender (creditor) and the borrower (debtor). It includes details such as the loan amount, interest rate, repayment schedule, and any other relevant terms and conditions. Promissory notes are commonly used in various financial transactions, including loans between individuals, businesses, and financial institutions.

Promissory Notes in Medicaid Planning

Medicaid is a public assistance program that assists individuals with limited income and resources in obtaining health insurance. It also serves as the primary way for millions of seniors in the United States to pay for long-term care services.

To qualify for Medicaid in most states, you must have no more than $2,000 in so-called “countable” assets to your name. Typically, five years before you apply, you may “spend down” your excess assets to bring them under this $2,000 threshold. Transferring assets within this five-year window of applying for Medicaid can otherwise result in a penalty period during which you may not be able to receive benefits.

Of course, not everyone plans this far ahead, as many people do not expect they will need long-term care. A Medicaid applicant may use a promissory note to transfer assets to other individuals, such as their children, while still complying with Medicaid eligibility requirements. By transferring assets through a promissory note, they can effectively reduce their countable assets, thereby helping them meet Medicaid's asset limit criteria.

How Do Promissory Notes Work in Medicaid Planning?

A person seeking Medicaid benefits might opt to transfer some of their assets to a family member, typically a child, in exchange for a promissory note. Assets can also be transferred to a trust. The beneficiaries of a person’s trust are often their children.

When the assets are transferred, a legally binding promissory note is created. The promissory note lays out the terms of the loan, including the principal amount, interest rate, repayment schedule, and other relevant information.

The borrower agrees to repay the loan according to the terms outlined in the promissory note, usually through regular installment payments over a specified period.

By transferring assets by way of a loan and creating a promissory note for the loan, the person seeking Medicaid benefits effectively reduces their countable assets, potentially qualifying them for Medicaid coverage.

Legal Considerations

Though promissory notes can be a valuable tool in Medicaid planning, it's important to ensure compliance with state and federal laws and regulations. As mentioned, Medicaid has strict rules regarding asset transfers and eligibility. Improper use of promissory notes could result in penalties or loss of benefits.

Key legal considerations include the following:

• Fair Market Value: The terms of the promissory note, including the loan amount and interest rate, should reflect fair market value to avoid scrutiny from Medicaid authorities.
• Payments: Payments on the loan must be made in equal amounts during the term of the loan with no deferral of payments and no balloon payments. (A balloon payment is a large payment made at the end of a loan’s term, after making much smaller payments along the way.)
• Term of the Loan: The term (length of time) of the loan must not last longer than the anticipated life of the lender.
• Debt Cancellation: The debt cannot be cancelled upon the lender’s death.
• Arm’s Length Transaction: The transaction should be conducted as an “arm’s length” transaction, meaning it should be carried out as if the parties were unrelated and dealing with each other at arm’s length.
• Look-Back Period: As stated above, Medicaid has a look-back period during which asset transfers are subject to scrutiny. In most states, the look-back period is five years. Any transfers made within this period may affect Medicaid eligibility, so it’s essential to plan accordingly.
• State-Specific Regulations: Medicaid rules vary from state to state, so it's crucial to consult with an experienced attorney familiar with Medicaid regulations in your state to ensure compliance.

Benefits of Using Promissory Notes in Medicaid Planning

Promissory notes offer several potential benefits in Medicaid planning, including the following:

• Asset Preservation: By transferring assets through a promissory note, individuals can preserve their wealth while still qualifying for Medicaid benefits to cover long-term care expenses.
• Control: The lender retains control over the repayment schedule and can customize the terms of the promissory note to suit their needs.
• Family Involvement: Promissory notes provide an opportunity for family members to participate in Medicaid planning and contribute to the financial well-being of their loved ones.

Risks of Using Promissory Notes in Medicaid Planning

When considering the benefits of using promissory notes in Medicaid planning you should also consider the risks, which could include the following:

• Regulatory Scrutiny: Improperly structured promissory notes may attract scrutiny from Medicaid authorities, potentially resulting in penalties or disqualification from benefits.
• Complexity: Medicaid planning involving promissory notes can be complex and requires careful consideration of legal and financial implications.
• Tax Implications: Transferring assets through promissory notes may have tax implications for the lender and the borrower, so it’s essential to seek professional tax advice.

Will a Promissory Note Work for Your Medicaid Planning?

Promissory notes can be a valuable tool in your Medicaid planning process. They could allow you to transfer assets while maintaining Medicaid eligibility. However, it’s crucial to navigate this strategy carefully, ensuring compliance with applicable laws and regulations.

Contact your elder law attorney today to talk further about gaining acceptance into the Medicaid program. They can help you determine whether including a promissory note in your planning will work for your situation. Elder law attorneys also can walk you through other benefits that may be available to you and help you understand how you can qualify for coverage.

HUD Housing Programs That Support Aging in Place

Ninety-three percent of adults 55 and older want to remain in their homes as they age, according to U.S. News & World Report. “Aging in place” involves growing old comfortably and safely in one’s dwelling.

As adults age, they may want to remain in their homes and communities for several reasons. For one, remaining in one’s own residence preserves independence.

When older adults remain in their home, they can continue local activities they enjoy and maintain their routines. They may be better able to maintain their quality of life.

Staying in the same community fosters social support. It makes it easier to sustain relationships with friends, neighbors, and community members. Seniors who need long-term care services also may be able to receive at-home care.

Several barriers can prevent seniors from aging in place. Rising housing costs, home maintenance, and lack of accessibility can prompt older adults and their families to consider senior living options, such as assisted living.

The cost of housing can be a particular burden for retirees on fixed incomes. More than half of older adult renters are cost-burdened. This means that they spend more than 30 percent of their income on housing, per the Joint Center for Housing Studies of Harvard University.

The Department of Housing and Urban Development (HUD) administers programs that can help older adults age in place. HUD programs supporting seniors include the Section 202 Supportive Housing for the Elderly Program and the Section 8 Housing Choice Voucher Program. Note that moving residences to participate in one of these programs may be necessary. However, these programs can help older adults remain in communities rather than entering assisted living or long-term care facilities.

Section 202 Supportive Housing for the Elderly Program

The Section 202 Supportive Housing for the Elderly Program incentivizes the creation of housing for low-income older adults. The program funds eligible private and nonprofit sponsors to create senior housing.

Section 202 housing provides support services essential to aging in place, such as cleaning, cooking, and transportation. This type of housing is available to households with at least one adult 62 years old or older. The individual or family must meet the program’s income requirements. The household income must be less than 50 percent of the Area Median Income (AMI) for the property’s location.

Residents of Section 202 properties typically pay 30 percent of their adjusted household income for rent. The federal government covers the remaining costs.

To find Section 202 properties, consider reaching out to a HUD-approved housing counselor for guidance. Note that, as HUD does not handle leasing, prospective renters must contact a property manager or owner directly.

Section 8 Housing Choice Voucher Program

Through the Section 8 Housing Choice Voucher Program, low-income renters who are older can select privately owned housing of their choice that meets program requirements. This gives older renters greater flexibility in choosing housing that meets their needs. For example, they may be able to look specifically for accessible housing.

Public Housing Agencies (PHAs) administer this program under HUD. Participating households receive a voucher. The program pays a housing subsidy directly to the landlord for the participating family or individual.

To be eligible for Section 8 housing, families and single people must meet certain requirements. Generally, their income can be at most 50 percent to 80 percent of the median income for their region.

Apply for the Section 8 Voucher Program by contacting your local PHA. HUD offers an agency directory. While waiting lists for Section 8 Housing can be long, some PHAs prioritize older applicants. HUD permits PHAs to prioritize certain applicants, which can include older adults.

Speak to Your Elder Law Attorney

Both Section 202 and Section 8 programs offer housing for low-income people. However, Section 202 specifically serves households with older adults. Section 8 housing is available to low-income households, including but not limited to families with older members.

Section 202 participants are more limited in their housing choices. They must reside in specific approved properties. Meanwhile, Section 8 participants have greater housing choice.

You may wish to remain in your home for as long as you can do it safely. As you consider housing options for aging in the community, your elder law attorney can help. They can assist you in identifying relevant housing programs and applying for Section 202 or Section 8 housing. 

Understanding Medicaid: What Does Medicaid Cover?

In the complex and frequently changing landscape of health care in the United States, Medicaid stands out as a vital program. Since 1965, it has provided essential coverage to millions of low-income individuals and families. Alongside Medicare, Medicaid serves as a lifeline for those who may otherwise struggle to afford health care services.

Though Medicaid exists to help those who need it, navigating the specifics of what it covers and does not cover can be daunting. This article highlights the basics of Medicaid coverage, shedding light on its benefits and limitations.

The Basics of Medicaid

Medicaid offers health care coverage to individuals and families with limited income and relatively few assets. The program provides a wide range of medical services, including doctor visits, hospital stays, prescription drugs, and preventive care. Medicaid is a joint federal and state program, so each state has the flexibility to administer the program differently within broad federal guidelines.

The eligibility criteria for Medicaid benefits can therefore vary from state to state. Generally, they relate to factors such as income, household size, disability status, and age. Some groups, such as children and pregnant women, may qualify based solely on income. Others, such as seniors and people with disabilities, may need to meet additional criteria.

Services covered by Medicaid also vary from state to state. Each state is required by federal law to provide Medicaid’s mandatory benefits. However, you cannot necessarily assume your state will cover the specific medical care you need.

The following benefits are provided as a guideline. Partner with a professional with expertise in your state’s Medicaid rules to ensure you get the most suitable coverage.

What Medicaid May Cover in Your State

Doctor Visits and Preventive Care

Medicaid should cover visits to primary care physicians, specialists, and other health care providers for preventive services. This may include vaccinations, screenings, and wellness exams.

Hospital Services

Medicaid coverage for inpatient and outpatient hospital care may include emergency room visits, surgeries, and medically necessary treatments.

Transportation to Medical Care

Medicaid generally covers the costs of emergency and non-emergency transportation to and from medical appointments and services that are covered by Medicaid.

Prescription Drugs

Medicaid provides coverage for a wide range of prescription medications deemed medically necessary by health care providers. However, coverage may vary depending on your state's specific guidelines.

Laboratory and Diagnostic Services

Medicaid may cover laboratory tests, diagnostic imaging, and other medical tests necessary for diagnosis and treatment.

Maternity and Newborn Care

Pregnant women enrolled in Medicaid receive comprehensive prenatal, delivery, and postpartum care, as well as coverage for newborn care.

Mental Health and Substance Abuse Services

Mental health services may be eligible for Medicaid coverage. These may include counseling, therapy, and psychiatric care, as well as treatment for substance abuse disorders.

Long-Term Care

Medicaid provides coverage for long-term care services. This includes care in nursing facilities and home health services for eligible individuals who require assistance with daily activities. Individuals may qualify for these services because of age, disability, or chronic illness.

Dental and Vision Care

Coverage for dental and vision services varies by state. Medicaid often includes preventive and basic dental care for children and limited coverage for adults. Vision care may include exams and eyeglasses for children.

What Does Medicaid Not Cover?

Cosmetic Procedures

Medicaid typically does not cover elective cosmetic procedures or treatments that are considered purely cosmetic in nature and not medically necessary.

Experimental or Investigational Treatments

Medicaid does not cover experimental or investigational treatments that have not been proven effective or approved by regulatory agencies.

Certain Types of Care

Though Medicaid covers a wide range of services, there are limitations on certain types of care, such as infertility treatments, elective abortions, and some types of alternative medicine. For example, the federal government lists family planning as a mandatory service benefit, but states interpret this differently.

Non-Emergency Medical Transportation

Though some states offer limited transportation assistance for medical appointments, Medicaid may not cover non-emergency transportation to health care facilities.

Out-of-Network Providers

Medicaid typically requires beneficiaries to receive care from providers within the program's network. Out-of-network care may not be covered except in emergency situations or with prior authorization.

Certain Prescription Drugs

Though Medicaid covers a broad range of prescription medications, coverage may be limited for certain drugs, particularly brand-name medications.

Routine Foot Care

Medicaid often does not cover routine foot care unless it is medically necessary. For example, treatments such as nail trimming, callus removal, or orthopedic shoes may be covered only for Medicaid beneficiaries with a specific condition, such as diabetes.

Seek Expert Advice on Medicaid

Medicaid plays a crucial role in ensuring access to health care for millions of vulnerable individuals and families nationwide. By covering a wide range of essential medical services, Medicaid helps improve the health of eligible beneficiaries. It also alleviates financial burdens for people with low income who may otherwise struggle to afford care.

Though Medicaid covers many services, exclusions and limitations could result in unexpected costs or denials of coverage. Be sure you understand the scope and limitations of Medicaid coverage in your state so you can make informed decisions about your health care needs and costs.

Contact your elder law attorney today to talk further about Medicaid. They can walk you through the benefits that may be available to you and help you understand how you can qualify for coverage.

States With the Highest and Lowest Assisted Living Costs

Today, 58 million adults in the United States are 65 and older. Seniors make up more than 17 percent of the American population. The U.S. Census Bureau expects this number to reach 83.7 million by 2050.

Meanwhile, one in every seven older adults will at some point need to rely on long-term care services in their later years. As a result, the growing number of aging Americans is creating an increased need for assisted living options.

What Is Assisted Living?

Assisted living is one type of long-term housing and care option for seniors. These facilities offer residential housing for older adults who need assistance with activities of daily living (ADLs). ADLs include such everyday tasks as bathing, dressing, preparing one’s meals, housekeeping, and managing one’s medication. Unlike nursing homes, assisted living facilities do not provide around-the-clock medical care to their residents.

The National Center for Assisted Living reports that there are currently more than 30,600 assisted living facilities and 1.2 million licensed beds in the U.S. According to the National Investment Center for Seniors Housing and Care, the senior housing occupancy rate rose for the ninth consecutive quarter, just surpassing 84 percent in late 2023. (The pre-pandemic rate, as of the first quarter of 2020, was 87 percent.) With this rising occupancy rate, the demand for assisted living is outpacing the number of beds available.

Seniors seeking information on assisted living options may find recent data from the Seniorly Resource Center particularly useful. The Center’s newly issued 2024 report sheds light on the costs of assisted living – from the most to the least expensive – across the U.S.

The Cost of Assisted Living

Across the country, assisted living costs an average of $4,401 monthly, increasing by 8 percent from 2021 to 2023.

During this timeframe, average assisted living costs grew in 30 states, remained about the same in six states, and fell in 15 states.

• Wyoming saw the most considerable increase. There, assisted living costs leapt by 53 percent between 2021 and 2023, from an average of $3,845 per month to $5,894 per month.
• In both New Hampshire and West Virginia, average fees rose by 46 percent. With average monthly costs rising from $5,644 to $8,248 in New Hampshire, it stands as the single most expensive state for assisted living. In West Virginia, assisted living prices went from $3,327 to $4,846 per month.
• Fees decreased by 15 percent in three states between 2021 and 2023. In Indiana, average monthly costs reduced from $4,328 to $3,695. Iowa fees lowered from $4,013 to $3,420. Washington State’s monthly assisted living fees went from $4,995 to $4,176 on average.

The Most Expensive, and Most Affordable, States for Assisted Living

While the prices of assisted living options can vary even within states, the findings identified the states with the highest and lowest fees on average.

As mentioned above, New Hampshire has the highest average monthly cost of assisted living at $8,248. Meanwhile, Louisiana has the lowest average monthly rate of $2,946.

The 10 most expensive states for assisted living, with monthly costs averaging above $5,000, are mainly located in New England and the Mid-Atlantic, reflecting the number of higher-end options available in these regions.

In-Home Care

Many seniors and their families may weigh assisted living against in-home care. Similar to assisted living, in-home care varies in affordability across states. An in-home aide costs an average of $5,462 per month in the United States.

• Minnesota is the most expensive state for home health aides, costing an average of $7,333 per month. Compared with in-home care, assisted living is in fact more affordable there, with an average cost of $3,472 per month.
• In West Virginia, home health costs an average of $3,793 per month, while assisted living costs an average of $4,846.

Weighing the pros and cons of assisted living versus in-home care remains essential. One 2022 study suggested that many seniors relying on in-home care were missing out on necessary assistance compared with those living in a residential facility setting.

Paying for Assisted Living

In addition to the rising costs of assisted living in many places, the Seniorly report points out that inflation has exceeded the Federal Reserve’s 2 percent target since March 2021. In addition, The New York Times also reports that senior living costs have risen faster than inflation.

Given the high costs of assisted living and in-home care, paying for care can be challenging for many families. Medicare does not cover assisted living room and board. Medicaid generally does not cover these costs, either; however, numerous states offer Medicaid assisted living waivers that can help. Unfortunately, waiting lists for such waivers may be lengthy.

According to Seniorly’s report, the typical American must save for about 17 years to be able to afford a single year of assisted living costs. To calculate this, it used the Census Bureau’s 2022 median annual household income and assumed 4.1 percent savings. Based on these estimates, it would take nearly 27 years of savings to pay for a year of assisted living in New Hampshire or about 12 years to afford a year of assisted living in Maryland.

Navigating Senior Care: Speak With Your Elder Law Attorney

Your elder law attorney can help you or your loved one organize strategies for affording long-term care. Contact them today to create a long-term care plan that will work for you.

Could Medicaid Payback Rules Come to an End?

Amid recent reports from such prominent news outlets as The New York Times and Associated Press about the negative impact of Medicaid estate recovery on families, the idea of ending this practice altogether has resurfaced.

What Is Medicaid?

Medicaid is a public assistance program that seeks to provide health insurance coverage for Americans with limited means. To be eligible for Medicaid in most states, you must meet strict income and asset guidelines. Generally, Medicaid rules will require that you have no more than $2,000 to your name.

Many older Americans who eventually need long-term care services come to rely on Medicaid to cover these costs. (Note that Medicare, a different government program, does not pay for long-term care.)

As of late 2023, the median monthly cost of a semi-private room in a nursing home in the U.S. was close to $9,000. The vast majority of people cannot afford to pay these prices out of pocket over the long term. So, they often opt to spend down what assets they do have until they can qualify for the Medicaid program.

What Is Medicaid Estate Recovery?

Federal law requires that states attempt to recover the funds they had paid out for a Medicaid recipient’s medical care during their lifetime. This might include any costs that have accrued for nursing facility services, prescription drugs, or other medical or long-term care. The Medicaid Estate Recovery Program specifically affects Medicaid long-term care recipients who had reached age 55 or older.

With certain exceptions, it’s mandatory for a state to seek these repayments from the person’s estate after they have passed away. States that fail to pursue this course of action may be at risk of losing the Medicaid funding they receive from the federal government.

Can Medicaid Take Your Home?

In most states, only property that is part of your probate estate is subject to Medicaid estate recovery. So, for instance, if you have named someone to benefit from your life insurance policy, those funds will pass outside probate in most places. However, your house may be your sole asset, and you may not have taken precautions to protect it from estate recovery. In this case, the state Medicaid agency could place a lien on it to recover its costs.

The financial consequences of the Medicaid Estate Recovery Program can be devastating for grieving families. As states seek to recover money they have spent on Medicaid beneficiaries who received long-term care benefits, families with lower incomes tend to be the ones in the crosshairs. In some cases, the survivors of the deceased may lose their family home or face bankruptcy.

The Stop Unfair Medicaid Recoveries Act

In March 2024, U.S. Rep. Jan Schakowsky (D-IL) reintroduced legislation, the Stop Unfair Medicaid Recoveries Act, proposing to end Medicaid estate recovery altogether. The bill would prevent states from placing liens on the homes of Medicaid recipients while helping to improve access to long-term care services.

According to the recent story in the Times, one nonpartisan agency cited that, for fiscal year 2019, most states recouped less than 1 percent of what they had spent on Medicaid long-term care benefits.

“This current system ... is ineffective and unjust, and it must end,” Schakowsky said in a news release about the Act. “Let’s give our seniors and their families dignity and peace of mind.”

Numerous advocacy groups had previously expressed their support for ending Medicaid estate recovery. However, the bill may not be particularly likely to move forward immediately.

Plan for the Unforeseen With Your Elder Law Attorney

Avoiding Medicaid estate recovery is possible, but it does take careful and deliberate planning.

Facing the possibility that you could one day need Medicaid long-term care coverage is important. After all, statistics show that seven in 10 older Americans are likely to require some form of long-term care in their later years.

Keep in mind that the rules regarding Medicaid benefits, which are specific to your state, can be complex. Be sure to work with your elder law attorney, who can help you navigate your potential options. They can assist you in planning for your future and guide you in making the best possible decisions. This might include strategizing about when and how to apply for Medicaid or looking for ways to protect your assets.

Getting Help When Providing Care at Home for Aging Parents

As they grow older, your parents may prefer to continue living in their home rather than moving to a long-term care facility. They are not alone in this; more than three-quarters of adults over the age of 50 say they would prefer to age in place. If your parent can safely live at home on their own with your support, you may wish to seek some form of outside help. Fortunately, you have a number of options to explore.

Home Care Services for Seniors

Public as well as private agencies offer a variety of home care services for older adults. These may include the following:

• Home health care, either part-time or 24 hours a day
• Personal care and homemaking services, such as shopping, cooking, and cleaning
• Services delivered to the home, such as meal programs, transportation, and home repair
• Money management
• Respite care service programs that provide unpaid family caretakers with a periodic break

Other Community and In-Home Support Options

The Program for All-Inclusive Care of the Elderly (PACE) is another initiative locally available to qualifying individuals. PACE provides services through adult health centers in different communities, with additional in-home support available.

More than 2,000 adult day care centers nationwide also offer such services as physical therapy and social support.

Medicare and Medicaid Home Health Care

Home care can cost far less than nursing home care. A growing number of states are therefore striving to provide services to older adults who wish to remain in their homes. Medicare and Medicaid are two programs that provide some coverage of the medical portion of home health care.

Coverage can often prove inadequate, however. Medicare will cover home health care services if you qualify. Meanwhile, Medicaid home care services vary widely from state to state.

If you have an older loved one who wants to age in place, you may need to combine Medicare or Medicaid with other resources.

Of the thousands of private home care agencies operating nationwide, about half are Medicare or Medicaid certified agencies. If Medicare or Medicaid cover the services these agencies provide, these programs will reimburse for these services. Such certification also means that the agency has met certain minimum federal standards regarding patient care and finances.

Private accrediting organizations can also certify home care agencies. The two major accrediting groups for home care agencies are the Community Health Accreditation Partner and the National Association for Home Care & Hospice.

Non-medical services are available to help older people remain independent as well. The Older Americans Act funds more than 10,000 senior centers and gives grants to states and Area Agencies on Aging to provide services for aging adults. Such services include Meals-on-Wheels, transportation, respite care, housekeeping and personal care, money management, and shopping. Services are usually free, but you may face waiting lists or staffing shortages, depending on where you live.

To find an Area Agency on Aging program near you, visit the Eldercare Locator or call 1-800-677-1116. In many cases, these agencies may offer case management and coordination services as well.

Support Though a Geriatric Care Manager

The profession of private geriatric care managers has evolved to help coordinate services for seniors. Geriatric care managers usually have a background in social work, nursing, or psychology. They offer expertise in helping older people and their families arrange for various kinds of long-term health care. They also help evaluate an older person’s needs, review available options, and monitor the older person’s care.

To find a geriatric care manager in your area, visit the website of Aging Life Care Association.

Additional Resources

As you navigate the options for home health care, reach out to your attorney. They can assist in long-term care planning, navigating Medicare and Medicaid, and finding ways to help cover the costs.

For further information on home care options, be sure to check out the following resources:

Websites

• AARP: Needs Assessment Checklists
• Family Caregiver Alliance: Hiring In-Home Help
• Caring Connections: Caring for Someone

Retirees: Deduct Your Long-Term Care Insurance Premium

Even if you have a long-term care insurance policy, you may likely be hoping that you won't ever have reason to use it. Regardless of what the future holds, there's one silver lining of which you may not be aware. That is, premiums on many long-term care insurance policies are in fact tax-deductible.

What Is Long-Term Care Insurance?

Long-term care insurance, or LTCI, can help you prepare for covering the cost of care in a nursing home facility or other setting when and if you need it. Unfortunately, the likelihood that you’ll need long-term care services at some point is high. In fact, about 70 percent of older adults find themselves having to rely on at least some long-term care in their later years.

When individuals require long-term care, it means that they need assistance when completing activities of daily living (ADLs). These basic daily tasks include dressing oneself, showering, or moving safely from one place to another in one's household, such as from the bed to the bathroom, or in and out of one's chair. In most cases, your LTCI policy will begin covering long-term care services if you cannot perform at least two ADLs on your own.

The cost of LTCI policy premiums can be out of reach for many people, and some insurers have been raising premiums over the course of time. According to one 2022 survey by HCG Secure, a mere one in 10 of Americans older than 65 have a long-term care insurance policy. However, if you have purchased a tax-qualified plan, you may be able to deduct the insurance premium as a medical expense.

Is My Long-Term Care Insurance Policy Tax-Deductible?

You can deduct numerous types of medical and dental expenses from your taxes. In addition to qualified long-term care insurance premiums, other deductible health expenses include the following:

• prescription medications and insulin
• substance use disorder inpatient treatment or smoking-cessation programs
• prescription or reading eyeglasses
• contact lenses
• hearing aids
• X-rays
• artificial teeth
• acupuncture treatments
• the cost of caring for a guide dog for a person with a vision or hearing disability

When filing your 2023 federal income taxes, check with your insurance broker or state insurance commission to determine whether your LTCI policy qualifies.

Only certain long-term care insurance policies meet the criteria for a tax deduction. The National Association of Insurance Commissioners sets these rules. Typically, many hybrid long-term care policies do not qualify for a premium deduction. (For more information on what defines a qualified LTCI contract, consult the IRS’ Publication 502 for the current tax year.)

If your policy does qualify, you can deduct your LTCI policy premium up to a specified limit. Keep in mind that you will only be eligible for a tax deduction if all of your eligible medical expenses totaled more than 7.5 percent of your adjusted gross income for the year.

Select states also offer LTCI tax incentives, so be sure to check with your tax advisor. Note, too, that if you are self-employed, the rules regarding these deductions can differ.

How Much Can I Deduct in 2024?

If your annual LTCI policy premium is higher than the limit provided in the table below, it will count as a medical expense. The older you are, the higher your deductible limit. For example, if you are a 75-year-old individual at the end of 2023, you may be able to deduct up to $5,880 in LTCI premiums as qualified medical expenses.

Table 1. 2024 LTCI Tax Deductible Limits.

Attained Age Before the Close of 2023	Maximum Deduction in 2024
Age 40 or younger	$470
Age 41 to 50	$880
Age 51 to 60	$1,760
Age 61 to 70	$4,710
Age 71 and older	$5,880

These are lower deduction limits than in previous years. The Internal Revenue Service adjusts these limits each year.

The cost of long-term care services can in large part depend on where you live. Check out this online tool to get an estimate based on your ZIP code.

The ins and outs of LTCI products can prove to be complicated. Consult with your attorney; they can provide guidance on purchasing an LTCI policy and also assist you in planning for the possibility that you will need long-term care in the future.

Medicaid Spend Down: Pay for More Than Just Medical Bills

Since the 1960s, Medicaid has provided health care coverage for low-income people across the United States. For millions of seniors, Medicaid offers financial assistance, helping them to cover the cost of long-term care services. Today, this joint federal-state program also benefits other qualifying populations with limited income, including children and people with disabilities.

Qualifying for Medicaid

You may not foresee yourself applying for Medicaid in the future. Yet in reality, research shows that roughly one in seven seniors are likely to require long-term care at some point later in life. Long-term care can be extremely costly; this is why many people have come to rely on the Medicaid benefits that cover these costs.

Given these sobering statistics, consider gaining a better understanding of Medicaid and shaping your plans sooner rather than later. To qualify for Medicaid, you may need to carry out certain actions at least five years prior to when you apply. That's because most state Medicaid agencies will look back at the five years leading up to when you submit your application for the program.

If you happened to make certain purchases or gifts during this so-called “lookback” period, you could end up facing a penalty. Unfortunately, these penalties could mean you have to wait months, or even years, before you become eligible for Medicaid.

Medicaid is for people living on limited incomes. So, among the main criteria to qualify for Medicaid is that you have limited income and assets. Generally, you must have no more than $2,000 in your name to be eligible for this public benefits program. (Note that this limit can vary according to state, however.)

If you have more than that, you may find yourself having to “spend down” your extra assets to meet the $2,000 limit. Only after you have fulfilled this (and other) requirements would Medicaid begin paying for basic long-term care expenses.

The upside, however, is that not all your assets count against you in the eyes of Medicaid. For example, your primary home is typically exempt. You also can own one car without worrying about exceeding Medicaid’s asset limits. And, depending on your state, you may be able to spend your excess money on certain items that help make your life more comfortable.

Medicaid Spend Down

As mentioned above, each state dictates what the income and asset limits are for Medicaid applicants. These figures also tend to shift a bit every year. 

Take note that not every state allows for a Medicaid spend down. These so-called “income cap” states follow different rules.

Also, take care that items you do decide to buy as part of your spend down are specifically for the Medicaid applicant.

So, What Can You Pay For?

All that said, Medicaid applicants can generally spend down their excess income in several ways. Paying off credit card debt or medical bills is one possibility. Prepaying for your funeral services is often a legitimate spend down option, too. Admittedly, these sorts of payments might not bring you much enjoyment, but they still may be able to count toward your spend down amount.

In many cases, you can spend down your surplus assets on medical services, equipment, or health insurance premiums.

Perhaps you have come to rely on a wheelchair or cane or could benefit from hearing aids. You may want to have an eye doctor check your vision. If your prescription eyeglasses are out of date, you may be able to purchase a new pair. These are all medical expenses that could potentially be part of your spend down efforts.

At the same time, your excess income can go toward much more than unpaid medical debt or other bills. Purchases that help improve your quality of life tend to be permissible. Here are five tangible types of items you may be surprised to find you can legally purchase as part of your Medicaid spend down:

• A new vehicle – You may need a reliable car or a wheelchair accessible vehicle to get to medical appointments. Keep in mind that some states place a limit on the value of your one vehicle. For example, you might not want to plan on purchasing an RV camper for road trips if you are seeking Medicaid assistance.
• Electronics – In some states, upgrades to your smartphone, laptop, television set, or another communications device may be a possibility.
• New clothes – It might be an ideal time for you to stock up on new socks, pajamas, or other clothing necessities.
• Books or subscriptions – Sources of entertainment can boost your quality of life, too. You may prefer books or magazines, or subscriptions to streaming services like Netflix.
• Towels and bedding – Check with a professional to see whether you can refresh your bedding or towel supply as part of your spend down. If moving to a long-term care facility, ask whether they provide these types of items for you.
• Furniture – You may be moving to a facility that allows you to bring along certain preapproved furnishings. For example, you might benefit from a recliner chair with a power lift in your new space.
• Home improvement – Even if you'll receive long-term care at home, you might be able to spend your excess income on modifying your residence. Maybe you need to invest in fixing your plumbing, paving your driveway, or installing a wheelchair ramp.

Consult with your attorney to understand what is and is not permissible. (A bonus is that you may in fact be able to include legal fees as part of your spend down process.)

Why It’s Key to Work With Your Elder Law Attorney

The rules regarding Medicaid get complicated quickly. Be sure to talk to your elder law attorney about Medicaid planning. Discuss your needs with them and ask what your options might be for spending down your assets. They can identify strategies to help preserve your hard-earned savings while avoiding potential Medicaid penalties.

Whatever you do choose to purchase, keep all your receipts and detailed documentation in case any questions come up. You don’t want to break the rules by accident and end up facing a Medicaid penalty period.

Selling Your Life Insurance Policy to Help Cover Expenses

The National Council on Aging reports that more than 16.5 million adults 65 and older experience economic insecurity, with incomes below 200 percent of the federal poverty level. Rising housing and health care bills can burden seniors on fixed, limited incomes.

Life insurance is an asset that many older adults have. According to Vital Life, 57 percent of Americans aged 65 and older have life insurance policies. In 2019, life insurance companies paid beneficiaries $78.4 billion and supplied $88.1 billion in annuity benefits, per Forbes.

While the purpose of a life insurance policy is to provide for beneficiaries, some older adults may consider selling their life insurance policies, allowing them to use a portion of the policy’s value to cover their expenses.

How Life Settlements Work

When you sell your life insurance policy, you can receive a life settlement. This allows you to obtain money to cover your expenses. The payment will be less than the full amount of the cash benefit. The average life settlement ranges from 10 percent to 25 percent of the full benefit, according to Smart Asset.

In return for the payment, an individual or company becomes the new policy owner. The new owner is responsible for paying all premiums and receives the full payment upon your death. Once you sell your life insurance, you are no longer responsible for paying the premium, but any intended beneficiaries can no longer benefit from the policy.

Once you have entered into an agreement in exchange for a life settlement, you no longer own the policy, and your loved ones will not be able to obtain payment when you pass away.

Reasons People Sell Their Life Insurance for a Life Settlement

Obtaining a life settlement allows you to capitalize on your life insurance policy now, helping you pay for your expenses, such as medical bills and long-term care.

If you are at risk of lapsing on payments, selling the policy allows you to avoid forfeiting it entirely. When you receive a life settlement, you will get more than if your policy lapsed or you surrendered it. Keep in mind, however, that many policies have grace periods for lapses in payment. Before giving up your life insurance policy, check with the policyholder to find out how much time you have to pay your premium before losing coverage.

Life settlements can also be beneficial if you no longer need a life insurance policy. For instance, if your spouse was your intended beneficiary, but your spouse passed away before you, you may no longer feel you need the life insurance policy.

Considerations When Selling Your Life Insurance Policy

While selling your life insurance could help you cover your expenses, it may not be the best choice for everyone. Your age, health, and the terms of your policy can all affect how much you will receive from a life settlement. Consider the following before making a decision:

• Before agreeing to a life settlement, contact your insurer to learn about all of your options under your policy.
• Speak with a life settlement broker or life settlement provider. The broker can help you shop around and find the best settlement offer. Brokers typically charge 8 percent and must disclose their fees upfront. You may want to ensure that the broker has a license in your state.
• Consider alternatives to a life settlement, such as taking out a reverse mortgage on your home or using the cash value of your insurance policy as security for a loan.
• Take time to review your outstanding debts. Creditors may attempt to take your life settlement.
• Speak to a tax professional about the tax consequences of acquiring a life settlement. You will likely have to pay taxes on the amount you receive.
• Take into account how the life settlement could affect whether you are eligible for government benefits, such as Medicaid. The settlement could constitute an asset that disqualifies you.
• The individuals who would have otherwise benefited from your life insurance policy may need to sign off on your life settlement. This is a requirement of some life settlement providers.

Consult With Your Attorney

If you are considering selling your life insurance policy, consulting with your attorney is essential. They can help you determine whether a life settlement could benefit you. This can also assist you in identifying alternative strategies allowing you to maintain your policy and afford care.