Medicare will not pay for long-term care, but Medicaid will assist with these costs. Medicaid planning is important for many seniors, because long-term care is very expensive. This is something to take into consideration when you are looking ahead toward your elder years.
Sometimes you can oversimplify things and wind up with a blind spot. If you have always been healthy, and you make good lifestyle choices, you may assume that you will never be in need of living assistance.
However, there is another way to look at this, and you should consider this alternative point of view before you assume that Medicaid planning is not important to you.
If you visit the Social Security Administration website, you can utilize their life expectancy calculator. You enter your age and your gender, and the tool will calculate your life expectancy.
Using this calculator, you find that a person who is 65 years of age on this day will probably live into his or her eighties.
To amplify this point further, a United States Census Bureau study found that the oldest segment of the population grew faster than any other between the years 2000 and 2010.
It would be logical to assume that people who take good care of themselves throughout their lives would enjoy longer lifespans. As a result, if you enter your retirement years while you are still in possession of your health, you may be among these individuals who live into their eighties and perhaps beyond.
Alzheimer’s disease strikes a very significant percentage of people who have reached their mid-eighties. According to the Alzheimer’s Association, about 40 percent of people who are at least 85 have contracted the disease.
Many elders who are in nursing homes are Alzheimer’s sufferers. Plus, as we all know, there are other underlying causes that can lead to the need for living assistance.
If you combine all the facts that we have touched upon to this point, you can see why Medicaid planning could be quite important to you, even if you have been healthy throughout your life.
Medicaid planning will involve a divestiture of assets because the asset limit is just $15,450 in New York in 2019. However, your home is not counted, with an equity limit of $878,000. One vehicle is exempt, and Medicaid would not count your wedding ring, your engagement ring, and your heirloom jewelry.
Personal belongings and household goods are not counted, and an applicant can have unlimited term life insurance. As much as $1500 worth of whole life insurance is allowed, and the same amount can be set aside for final expenses.
When it comes to be assets that are counted, you can essentially give your children their inheritances in advance. However, it takes advance planning to qualify at the right time, because there is a five-year look-back. You are forced to pay out-of-pocket for a prescribed period of time if program evaluators find that you have given away assets within five years of submitting your application.
The amount that you gave away would be compared to cost of long-term care in New York. Your penalty would be determined based on this equation. To provide a simple example, if you gave away enough to pay for 18 months of long-term care, your eligibility for Medicaid coverage would be delayed by 18 months.
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