Medicaid is a needs-based program for people who cannot afford the care they need. It is commonly referred to in Iowa as “title 19” or more ominously “the state” or incorrectly “the nursing home”. In most cases you are eligible for Medicaid for nursing home care if their income 2024 is $2,829 or less per month (2024 number) and their nonexempt resources are under $2,000. Exempt resources are a vehicle, a homestead (in the country for a farm homestead touching acres stay with the homestead but the 40 down the road is not exempted) household goods, and prepaid funeral plans. Note the lack of numbers attached to those exemptions. In broad terms, the person in the home, probably via a POA, pays all but $50 of that monthly income towards care and the state picks up the rest.
If you are married, it’s a bit more work to determine. The spouse is not entering the nursing home can have more than $2,000 in resources without disqualifying the spouse who lives in the nursing home from receiving Medicaid. The community spouse’s separate income does not count toward the $2,829 income limit. In addition, if the community spouse’s monthly income is less than $3,853.50 then most of the income from the spouse in the nursing home may be kept by the community spouse and not be considered to be available to help pay for care in the home.
Once it’s clear that you cannot perpetually pay for care, apply for aid from the state when you are putting a spouse in a nursing home. Do not spend it down to the nub and then apply. The spouse not going can keep asset. While all nonexempt assets are eligible for payment, the state allocates half of the eligible assets to each spouse with the community spouse is assigned a minimum of $30,828 and a maximum of $154,140 (in 2024). That would be just a bit over $300,000 of asset (excluding a house). The state will say spend down that 150Kish of asset on the spouse’s nursing home care and then we will open up the state’s wallet. Notice spend down, not give away.
Don’t believe them. Appeal. It’s like talking the sales manager instead of the car salesman. Because of a quirk in how the state interprets the federal rule, until you have had a review and opportunity to appeal, the amount is sometimes arbitrarily too low based on age and life expectancy.
Once you get the states final number, the community spouse needs to put their assets in their name and not the spouse’s name who is needing care.
Eligibility
If the income is over the monthly amount, but would fall under that amount after paying the bill for the month, a Miller Trust can be used to maintain eligibility during the “high tide” of the month , knowing that “low tide’ is returning soon.
Another concept that is important that you cannot have sold, transferred, or given away property within five years of applying for state assistance. If you have sold or transferred property without getting market value, or just given it away, you will need to pay that amount of care yourself before the state’s wallet is open. Its five years, not three, not seven. Five. The state won’t care if you gave away furniture, old tools, and a collection of Watkin’s liniment bottles, but tractors, dirt, stocks, bonds, and inheritances they do care. Yep, if you have a weird generational gap and your aunt is only ten years older than you but you are falling apart quicker, if she has you in her estate plan, if you are on title 19, you cannot disclaim the bequest. You will be bounced off Title 19, spend down that inheritance, and then have to reapply.
Iowa code clearly says husband and wife are responsible for each other’s medical bills. The state is not a party to any pre-nuptial agreement folks might want to make. Mindful, deliberate, and not cutesy estate planning should be undertaken before any second or third wedding by Octogenarians. At the risk of sounding harsh, a full physical like the professional sports teams do before a trade might be a good idea before springing for ring.
When the first spouse dies, the state will let you know how much the state has advanced. It is not due until the second spouse dies. In practice, if the second spouse, then dies without any assets, no recovery is made. Iowa is noted as a fairly aggressive state in collection efforts, but they only get about 1 percent of funds expended on care recovered.
As no crystal balls with exact dates of ill ness and death are available from Amazon, Temu , Wish or those sketchy Instagram sites, planning ahead is the plan to have.
