If you are under 65 you only need to pass an income test to qualify for Medicaid. Once you turn 65 you need to pass an asset test to continue coverage under Medicaid. An asset test is the total money you have in bank accounts, stocks, bonds, CD's, and retirement accounts. Just before her 65th birthday, my partner received a denial letter for Medicaid. Then she received a letter asking for a list of her assets. Since she only has a checking account, she went to their office and gave them a copy of her last bank statement. Shortly after that she received an approval letter. Then a week later she received a denial letter, and a week after that, a pending approval letter saying they needed her asset information. It became clear to us that Health and Human Services was overwhelmed with medical assistance requests and letters were being automatically sent based on arbitrary deadlines. In total she received six letters alternating between approval and denial within 6 weeks.
She decided to call her assigned HHS case worker to try and get the status of her health insurance application. The case worker said that she never received her bank statement. She also said that my partner would need to spend down her assets to $3000 to qualify for Medicaid. I looked it up online and it said that after you turn 65 the income limit is $14,820 and the asset limit is $10,000. The $3000 asset limit is for long term care coverage. Prior to age 65, the income limit is $19,391 for an adult without children. So, with that, my partner has no health insurance and will need to apply for Medicare. It would have been nice if they had told her this was going to happen and listed her options. Instead, you have to figure it out on your own. Going down the Medicare rabbit hole also includes deciding when to apply for Social Security.
We logged into the Social Security website, and it showed that her full retirement age is 66 and 10 months. If she applied for Social Security today at age 65, she would get $689 per month. At her full retirement age in two years, she would get $785. Her income history is sparce, but at least she had the 10 years of earnings needed to qualify. I'm a few years younger than her, so this is a preview to the decisions I will need to make. My estimated benefit at age 67 is $2699. It would be advantageous for me to delay Social Security for as long as possible. But having to wait another 5 1/2 years will be difficult. My taxable income for 2023 was only about $14,000 and my partner had zero income!
We also discovered that Medicare isn't free. It gets progressively more expensive depending on how many options you add. Medicare part A (Hospital Insurance) has no premium, but there is a $1632 deductible. Medicare part B (Medical Insurance) costs $174.70 per month with a one-time $240 deductible and a 20% co-pay after the deductible. Part C & D (Advantage and drug coverage) vary in cost depending on which company you select and which deductible and co-pay options you choose. They do have free Advantage plans, but the deductibles are so high that it isn't really an option. A plan with dental and vision and $3000 deductible costs about $80 per month. We are expecting to pay at least $260 in monthly premiums. This money would need to be deducted from her monthly Social Security payment. That doesn't leave much for living expenses or saving for future needs.
Since she is divorced, she qualifies for ex-spousal benefits. But it would only be 50% of her ex-husband's full retirement benefit. Either her benefit amount or 50% of her ex-husband's benefit, whichever is greater. For example, if his benefit was $1700 per month, she would be able to get $850 instead of $785. If you are the divorced spouse of a worker who dies, you could get benefits the same as a surviving spouse, provided that your marriage lasted 10 years or more. Widows are due between 71 percent (at age 60) and 100 percent (at full retirement age) of what the husband was getting before he died. That goes both ways, if you made more money than your husband, then he might be due a widower’s benefit on your record if you die before he does. It's ironic to know that the Social Security office considers an ex-spouse to be worth more to you after they pass away.
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