Medicaid is a means-tested program that you can qualify for only if you have limited assets. The asset limit can pose a substantial problem for many people who need to qualify for Medicaid.
The issue is that Medicaid may be the only program available to cover the costs of nursing home care for most seniors, since Medicare and private policies typically only cover a nursing home for limited duration under a very limited set of circumstances. Many seniors have acquired assets over the course of their lives and thus are not able to qualify for the Medicaid coverage that they need because of the fact that they have too much money or property.
This leaves seniors in a difficult position. If they must go into a nursing home and no insurance will pay for it, they could be forced to spend down their life savings. Only after the money is gone, and some property is potentially lost as well, will Medicaid begin to pay for the necessary nursing home care. However, there is another alternative: Medicaid planning.
Medicaid planning can shield some or all of your assets from being lost when you need nursing home care. Your ability to protect assets is going to depend upon many factors, including when you began the Medicaid planning process. An experienced attorney at Unsworth LaPlante, PLLC can assist you in understanding how a Medicaid plan can help you and can guide you through the planning process. This is a process that you should ensure you have the right legal advice for since there is a lot of money at stake. Our legal team will offer you the personalized advice that you need to make the best plans to protect your wealth.
Although there is no substitute for this personalized advice, we have also prepared the answers to some frequently asked questions below so you can find out more about the Medicaid planning process.
Why is it important for seniors to know eligibility requirements for Medicaid?
It is important for seniors to know eligibility requirements for Medicaid because many seniors will need to successfully apply for Medicaid coverage to get nursing home care paid for. As you get older, your chances of needing care in a nursing home rise.
Unfortunately, Medicare only pays for skilled care, such as when you’ve had surgery and must have the bandages changed by a nurse. Outside of these circumstances, Medicare provides no coverage for nursing homes. Most seniors don’t need skilled care in a nursing home setting but instead move to a home because they can’t live alone due to medical conditions like dementia or simply due to old age.
When a senior needs to move into a nursing home due to old age or infirmity, the senior needs custodial care. Medicaid will pay for custodial care for eligible seniors even while virtually no other insurance will. Seniors thus need to know if they’re eligible for Medicaid so they can take advantage of the benefits if they are and so they can try to make a plan to become eligible if they aren’t.
What are some common Medicaid planning mistakes?
Making a Medicaid plan is essential if you want to ensure you can get Medicaid to pay for the nursing home bills you incur as you get older and must move into a nursing care environment. Unfortunately, many people make Medicaid planning mistakes that end up costing them the ability to get the care that they require.
Some common Medicaid planning mistakes include waiting too long to make a Medicaid plan, using the wrong kind of trust for Medicaid planning, and not getting legal help with the planning process. If you wait too long, you may not be able to protect all of your assets that you would have hoped to keep shielded from Medicaid. If you use the wrong kind of trust as a part of your plan, the assets that are held within the trust may not actually be protected at all, even if you think that they are.
All of these mistakes can be avoided by working with an experienced attorney. Unsworth LaPlante, PLLC can guide you through the entire process of Medicaid planning and ensure you don’t make any errors that could cost you the money and property that you worked a lifetime to acquire.
Why do you need to start Medicaid planning early?
If you do not already have a Medicaid plan in place, you should reach out to an attorney and start the Medicaid planning process today. When you apply to get Medicaid overage, Medicaid looks back at five years of financial transactions. If you transferred ownership money or property, including giving money or property as a gift, this could temporarily disqualify you from being able to get Medicaid coverage.
This review of five years of transactions is called the Medicaid five-year lookback rule, and it is a rule meant stop people from gaming the system by just giving away all of their money and property if they get sick and need nursing home care. If you gave away money or property (or sold it to a family member for much less than it was worth), this could result in a period of temporarily disqualification from getting Medicaid to cover you.
The temporary disqualification period is determined by dividing the value of the transferred assets by average monthly nursing home costs in the location where you reside. A larger transfer, therefore, would result in a longer disqualification period. The calculation gives you the number of months of disqualification.
If you transferred $50,000 worth of assets and the average monthly cost of nursing home care where you live is $5,000, then the calculation would be $50,000/$5,000 = 10 months. During this disqualification period, you would not get coverage for nursing home care though Medicaid.
If you plan ahead, you can avoid this. Contact Unsworth LaPlante, PLLC to get more of your questions on Medicaid answered and to get help with the Medicaid planning process.