IRA’s Get Better in Indiana

Recent Medicaid rule changes have made IRA investments even more valuable for Hoosiers. As of June 1, 2014, IRA accounts (including 403b, Keogh accounts, and other tax-deferred accounts funded with pre-tax dollars) no longer count as assets if your spouse has to enter a nursing home!

While no one wants to go to a nursing home, there are times when nursing home care is needed. With the cost of nursing home care at $6,000 a month on average in Indiana, few Hoosiers can afford to pay for their care for very long.

Medicaid pays for most folks’ stays in nursing homes in Indiana. When a spouse goes into a hospital and/or nursing home, the first date of admission for the first continuous 30 plus day stay after September 30, 1988, becomes their snapshot date. The Medicaid office uses the snapshot date asset totals to determine eligibility at a later date. The spouse at home gets to keep one-half of their countable resources as of the snapshot date, subject to a maximum of $117,240 and a minimum of $23,184.

The IRA accounts of a community spouse counted as an asset before June 1, 2014. IRA accounts owned by the community spouse are not countable resources as of June 1, 2014.

For Example:

Dad goes to the hospital on April 11, 2014; he then goes to the nursing home where he must stay because of his health. This is the first period of time he is in an institution for more than 30 days, making April 11, 2014, his snapshot date.

On April 11, 2014, they own:

One car worth 10,000 (exempt)

One home worth 200,000 (exempt)

Wife IRA 75,000

Bank Account 50,000

Insurance Cash Value 5,000

Their calculated resources are $130,000 as of April 11, 2014. Dad qualified for Medicaid on June 1, 2014, when their countable resources were under $67,000 (1/2 of $130,000 + $2,000 Dad can have).

Dad is eligible for Medicaid as of June 1, 2014. Since Mom’s IRA no longer counts as an asset, their countable resources are now $55,000. We will be publishing articles about additional changes in the Indiana Medicaid rules next month.

September 2014
Keith P. Huffman

Categories: Article, Elder Law, IRA, and Medicaid Planning.