Question

Belinda spent the last 60 days of 2018 in a nursing home. The cost of the services provided to her wras $18,000 ($300 per day). Medicare paid $8,500 toward die cost of her stay. Belinda also received $5,500 of benefits under a long-term care insurance policy she purchased. What is the effect on Belinda's gross income?

Answer 1

Assuming that the $300 per day charge is less than the maximum exclusion, none of the amounts received must be included in gross income.

 

The amount Belinda may exclude is calculated as follows:
Greater of:
Daily statutory amount in 2018 ($360 × 60 days)                         $21,600
Actual cost of the care ($300 × 60 days)                                           18,000                             $21,600
Less: Amount received from Medicare                                                                                        (8,500)
Amount of exclusion $13,100

 

Belinda’s exclusion amount ($13,100) is greater than the benefits she received ($5,500); therefore, none of the amount received is included in her gross income.

None of the amount received is included in her gross income.