Many seniors who need daily custodial care are forced to turn to state Medicaid programs. And in these days of dwindling state budgets, that's not likely to be an appealing solution, despite some federal matching funds recently added to some state budgets under the Affordable Care Act. Here's what you should know if you're counting on Medicaid as a last resort for custodial care:
Medicaid care takes away choice. The majority of custodial care is given in an institutional setting. That structural bias takes away the chance to remain at home and have limited care for several hours a day. It also takes away your choice of nursing homes.
Each state sets its own criteria to qualify for Medicaid custodial care. For example, Illinois provides long-term care services for 55,000 eligible residents in 738 nursing facilities. Those facilities take all but $30 a month from your Social Security or other income to pay for your care.
Each state sets its own limitations for how much of your income will be retained by your spouse. For example, in Illinois in 2015, the non-Medicaid spouse could keep up to $2,980.50 of income per month from the Medicaid spouse.
It obviously is tempting to transfer assets to children in order to qualify for your state's Medicaid long-term care program. In fact, an entire industry has sprung up to plan for this eventuality. But states are getting tougher — creating a "look back" period.
The average stay in a long-term care facility is 2.43 years, so you may be better off purchasing a short-term long-term care insurance policy — one that allows the flexibility of choosing benefits for home health care, assisted living or a nursing home, as needed.