Like most people, you may have spent your youth without ever giving a thought to the possibility that you might one day need nursing home care. After all, young and healthy people rarely think about how their bodies might one day betray them as the aging process makes it more and more difficult to care for their own needs. Still, that happens to many of us, and some experts suggest that roughly half of us will someday spend at least some time as a resident in a long-term care facility. To prepare for that possibility, you need long term-care planning that makes full use of the opportunities that are made available by Indiana Medicaid laws.
Why Does Medicaid Matter for Nursing Home Care?
Some may read this and wonder why Medicaid matters at all. Many will just assume that, given enough time and planning, they should be able to pay for their nursing home care on their own. As attractive as that thought may be, however, it’s not as realistic as it might seem. The fact is that nursing home costs are higher than ever before, with the average cost of care in Indiana estimated at around $6,000 a month. That’s far more than the average senior is likely to have on hand, regardless of how much planning he or she did earlier in life.
The problem seniors have is that there really is only one option for most of them, and that option involves qualifying for Medicaid nursing home benefits. Medicaid’s mission to provide healthcare insurance to low-income Americans has enabled the program to become the single largest source for payments to the nursing home industry. Still, qualifying for those benefits can be an adventure. The program’s eligibility standards are notoriously strict.
Those standards include strict limits on assets and income that many seniors may have trouble meeting. For example, the total value of the countable assets you own cannot exceed $2,000 – and income must be limited to no more than $2,199 per month. Any amount over either of those limits could result in a denial of your benefit application, leaving you with no other options to pay for your care.
What Type of Long-Term Care Planning Do I Need?
To avoid that denial, you need long-term care planning. An experienced Indiana Medicaid planning attorney can help you to create a plan that will prepare your estate for any future Medicaid needs by organizing assets and income in a way that ensures success in the application process. There are many options that you can pursue to accomplish that goal, but your best chance of preserving most of your assets can only be realized when that planning begins as early as possible.
To that end, most estate planning attorneys recommend that you begin to think about the potential need for long-term care earlier in your working years. While it might seem as though you have all the time in the world to get your plans and affairs in order, that’s never really the case. After all, thousands of people suffer debilitating and incapacitating injuries every year, and many of them find themselves in need of long-term care long before they ever thought it possible.
Your plan should include some combination of the following tools and strategies:
- Irrevocable trusts to place assets outside your control. That can help to ensure that Medicaid doesn’t count those assets as part of your estate when it calculates your eligibility for benefits. In addition, you can set up your trusts so that you still receive any income that is generated by those assets.
- Gifting strategies designed to remove assets from your estate. This can reduce your total wealth and help you get closer to those Medicaid eligibility limits. Gifting can be especially useful in situations where you’ve already planned to give loved ones an inheritance, but fear that nursing home costs will consume your estate and leave you with nothing to give them when you die. You can effectively give them their inheritance early, and get the added benefit of seeing the joy that it brings to their lives.
- Long-term care insurance could be of benefit to you as well. It can help to cover much of the cost of nursing home care, if you maintain your policy and pay your premiums. However, the costs of those premiums can be more than most people can afford, which is why few Americans carry this coverage.
How Can I Ensure that My Plan Aligns with Medicaid Laws?
The tricky part about any long-term care planning is ensuring that you don’t run afoul of the Indiana Medicaid laws. Your income and assets not only need to be under the designated limits, but you also need to meet residency requirements and demonstrate that you have a medical need for that level of care. As a rule, however, the latter two requirements are not typically an issue.
The five-year look-back period can be problematic, especially for those who try to handle their own long-term care planning. That look-back period involves a provision in Medicaid law that empowers the government to count certain asset transfers made within the five years prior to your application filing as assets for the purposes of determining eligibility. When such transfers are found, they can be grounds for rejecting your application, and may result in eligibility penalties that could force you to pay your own care for many months.
How Can an Indiana Medicaid Planning Attorney Help?
The best way to understand and use Indiana Medicaid laws for your own benefit is to work with an experienced estate planning and Medicaid planning attorney. At Frank & Kraft, Attorneys at Law, our Medicaid planning experts can help you to ensure that your long-term care planning is conducted with the state’s laws in mind. That can help you to avoid mistakes and costly penalties, protect your assets to the full extent allowable, and secure the benefits you need when you need them. If you’d like to learn more about how Indiana’s laws can affect your Medicaid planning, call today at (317) 684-1100, or contact us at our website.
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.