After savings wear out, they'll rely on Medicaid

By Deborah Adamson
Advertiser Staff Writer

Ruth Dias Willenborg knew something was wrong when her husband started experiencing short-term memory loss and his gait progressively got worse.

The 74-year-old is bracing for the day when her husband, now 69, will need long-term care. They don't have long-term insurance; she'd rely on savings to tide them over first, then go on Medicaid once the money has dwindled.

To qualify for Medicaid, single seniors must whittle down their assets. If married, the senior needing care can transfer up to $90,660 in assets to the spouse to qualify for the program. However, if the spouse dies first, the assets get transferred back to the senior. He or she must put it somewhere else, or spend it, to show only $2,000 in assets to qualify for Medicaid.

As for moving assets to relatives, it can be a disabled relative, a minor or the minor's trust fund, according to Lillian Koller, director of if the state Department of Human Services. But if you want to transfer assets to an adult relative, you will have to pay a penalty equal to the amount of money transferred.

What if you're not ill enough for Medicaid, which pays for skilled medical care only, or you need to hire a caregiver?

You can raise money by selling your house, borrowing against it or taking out a reverse mortgage, said Ralph S. Matsuda, a retired financial planner and member of The Honolulu Committee on Aging. But once you leave the home for a year — say, to go to a nursing home — the lender can foreclose, Matsuda said.

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