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Medicaid Planning for Married People




Ralph and Alice were high school sweethearts who lived in St. Louis, Missouri, their entire adult lives. Two weeks ago, Ralph and Alice celebrated their 51st anniversary. Yesterday, Alice, who has Alzheimer’s, wandered away from home. Hours later she was found sitting on a street curb, talking incoherently. She was taken to a hospital and treated for dehydration. Ralph comes to see you after their family doctor tells him he needs to place Alice in a nursing home. He tells you they both grew up during the Depression and have always tried to save something every month. Their assets, totaling $100,000, not including their house, are as follows:


Savings account $15,000

CDs $45,000

Money Market account $37,000

Checking account $3,000

Residence (no mortgage) $80,000


Ralph gets Social Security and Pension checks totaling $1,500 each month; Alice’s check is $450. His eyes fill with tears as he says, “At $5,000 to the nursing home every month, our entire life savings will be gone in less than three years!” What’s more, he’s concerned he won’t be able to pay her monthly nursing home bill because a neighbor told him that nursing home will be entitled to all of their Social Security checks.


There is good news for Ralph and Alice. It’s possible he will get to keep his income and most of their assets… and still have the state Medicaid program pay Alice’s nursing home costs. While the process may take a little while, the end result will be worth it.


To apply for Medicaid, he will have to go through the Missouri Family Services Division (FSD). If he does things strictly according to the way FSD tells him, he will only be able to keep about 1/2 of their assets (or about $50,000), plus he will keep his income.


But the results can actually be much better than the traditional spend-down, which everyone talks about. Ralph might be able to turn the spend down amount of roughly $50,000 into an income stream for him that will increase his income and meet the Medicaid spend down virtually right away. In other words, if handled properly Alice may be eligible for Medicaid from the first month that she goes into the nursing home.


Please note this will not work in every case. That’s why it is important to have an expert guide you through the system and the Medicaid process to find the strategies that will be most beneficial in your situation. So, he will have to get advice from someone who knows how to navigate the system. But with proper advice he may be able to keep most of what he and Alice have worked so hard for. This is possible because the law does not intend to impoverish one spouse because the other needs care in a nursing home. This is certainly an example where knowledge of the rules and how to apply them can be used to resolve Ralph and Alice’s dilemma.


Of course, proper Medicaid planning differs according to the relevant facts and circumstances of each situation as well as the state law.

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