Elder law attorneys help clients who are interested in preparing for the eventualities of aging. When you are planning ahead for your active senior years and the twilight years to follow, you should understand what to expect from government programs like Medicaid and Medicare.
When you see the complete picture as it applies to long-term care, you will immediately understand how a Medicaid lawyer can save you a great deal of money if you plan ahead proactively. Let’s look at the facts.
Medicare
When you pay taxes on your earnings, part of what you are paying goes toward future Medicare coverage. Medicare is a government-run health insurance program for senior citizens.
As you are paying these taxes you are earning retirement credits. You can earn a maximum of four credits per year. Once you have accumulated 40 retirement credits, you qualify for Medicare. There is no higher level of Medicare that you can qualify for if your credit accrual exceeds 40 credits.
How are credits issued? In 2016, you earn a credit for every $1,260 that you earn. As a result, if you earn at least $5,040 in 2016, you have earned the maximum four credits for this year.
There are different parts to the Medicare program: Part A, Part B, Part C, and Part D.
Medicare Part A is the part of the program that applies to inpatient hospital stays. You should understand the fact that every penny of your hospital stays will not be covered.
There is a per-benefit-period deductible, and there are significant co-payments for long hospital stays.
Part B covers outpatient treatment and visits to doctors. There is a modest deductible for this coverage, and you also have to pay a monthly premium. In 2016 the majority of participants have been paying $104.90 per month for Part B coverage. Most people have this deducted from their Social Security checks.
Part C allows you to use your benefit to obtain private coverage that would streamline your insurance situation. Part D is an optional prescription drug plan.
Medicare is specifically designed to provide health insurance for senior citizens. Under currently existing laws, you become eligible for Medicare coverage when you reach the age of 65 assuming you have accumulated the necessary 40 retirement credits.
How Medicaid Differs From Medicare
Medicaid is different from Medicare in a number of different ways. First off, Medicare is a program that is available to everyone who has paid into it sufficiently. You can be the richest person in America and still qualify for Medicare.
On the other hand, Medicaid is a need-based program. It provides health insurance for people who have virtually no financial resources. If you have more than $2,000 in countable assets, you cannot qualify for Medicaid coverage.
Another one of the differences is the fact that people of all ages can qualify for Medicaid. As we stated in the previous section, Medicare is designed to provide health care coverage to senior citizens.
A third very important difference is the fact that Medicaid will assist with long-term care costs. Medicare does not pay for an extended stay in an assisted living community or a nursing home. This is why a Medicaid attorney can provide you with important legal counsel when you are looking ahead toward the future.
Potential long-term care costs are something that everyone should take seriously, because.these expenses are not easily paid out of pocket. If you are not aware of the present state of long-term care costs, you may be rather unpleasantly surprised when you hear the facts.
The MetLife Mature Market Institute published a survey a few years ago, and it stated that the average cost for a year in a private room in a nursing home across the United States exceeded $90,000. Since then, costs have been rising year-by-year in most areas.
The average length of stay is about 2.3 years. Of course, some people remain in the facilities beyond the average length of stay. When you do the math you’re looking at some big numbers. A high percentage of people simply don’t have that kind of money.
There are those who could possibly use their savings to pay for long-term care, but it would wipe them out. They would have nothing left to leave behind to their loved ones.
Consult With a Medicaid Lawyer
Because of these expenses, many people who were qualified for Medicare ultimately apply for Medicaid to pay for long-term care. As we stated previously, there is a $2,000 limit on countable assets. To stay within this limit, you can give gifts to your loved ones, but timing is key, because there is a five-year look-back. Your eligibility is delayed if you give gifts within five years of submitting your application for Medicaid coverage.
Since program rules are complex, a Medicaid lawyer can help you devise a plan that keeps assets in your family as you take steps that lead to Medicaid eligibility. If you’re ready to get started, call us at (317) 684-1100 or send us a message through our contact page to set up a consultation.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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