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Home » Medicaid in Indianapolis: Qualifying for Nursing Home Coverage

Medicaid in Indianapolis: Qualifying for Nursing Home Coverage

July 7, 2016Medicaid

With nursing home costs at sky-high levels, are you prepared to pay for your long-term care? Learn how to protect your assets so that you can qualify for Medicaid insurance to help.

Nursing home care has been a wonderful societal advance that has enabled millions of the nation’s seniors to receive the care they need when independent living is no longer an option. For many of those seniors, however, the high costs associated with long-term care are often more than they can bear. Each year, many older people are faced with the prospects of seeing their entire life savings eaten away by nursing home costs that can be as high as thousands of dollars a month. Fortunately, there is help available from Medicaid in Indianapolis, but receiving that assistance may require some advance planning on your part. The following asset protection strategies can help you make sure that you qualify for Medicaid assistance when you need it most.

Why it Matters

There’s no sugar-coating it: nursing homes are expensive. In Indiana, the cost of care can be as much as $80,000 each year – higher than the median income most seniors have enjoyed throughout their lives. Obviously, those costs are more than the average senior can afford, even if he or she had managed to save and invest much of their income. Moreover, many of these older Americans want to leave something to their heirs when they pass away – something that just won’t happen if nursing home costs destroy their life savings in just a few short years.

There is also the issue of dependence to be considered. Like many seniors, you would probably like to avoid being in a situation where you are limited to no more than $2,000 worth of savings and monthly income that cannot exceed $45. You’ve spent your life living independently, and would like to retain some of that dignity in your twilight years as well. To do that, however, you may need to transfer some of your assets to loved ones to ensure that they are not taken to pay for the cost of your nursing home care.

Gift Restrictions

As you might expect, Medicaid’s empowering laws are designed to prevent you from getting rid of assets just to qualify for Medicaid assistance. As part of the federal laws governing the program, the states are commanded to deny this assistance to anyone who can be shown to have dispensed with assets within the five-year period prior to filing their Medicaid applications, if those assets were not sold for a determined “fair market value.”

Obviously, those provisions would create a penalty for you were you to try to give away your assets within that five-year period. Furthermore, those penalties go into effect regardless of whether it is you giving away the property or income, or your wife or a designated agent acting in your capacity. As long as those transfers take place within that window of time, you may find yourself unable to obtain Medicaid assistance for nursing home or home health care costs.

How You Can Plan Now

The entire structure of the system as it currently exists provides every incentive for you to plan now for those future needs. At the very least, you should begin your efforts to prepare for Medicaid eligibility well in advance of that five-year look-back period. Keep in mind that early planning for these things ensures that you have the widest range of options available to you.

For many people, these options usually involve giving away assets prior to the start of that five-year period – usually to their children or other family members. This removes those assets from consideration when a later determination has to be made about Medicaid eligibility. It should be done with care, however, since older Americans will still need to ensure that they have enough money to survive until they are ready for nursing home care, or to get them through the five-year period if they waited until the last minute to protect their wealth.

  • One option involves keeping a portion of your wealth, giving away the bulk of it, and relying on a long-term care insurance policy to provide enough benefits to manage your care through the five-year period.
  • You can also set up an irrevocable grantor trust, transferring all of your assets – minus any that are needed to pay for potential care through the look-back period – into the trust to protect them from Medicaid consideration.
  • Finally, you could just give everything away to your children and rely on a pension and Social Security to see you through until you need nursing home care. That usually entails an agreement on the part of those children that they will help with care later in exchange for their inheritance now.

Why You Need an Attorney

In virtually all of these scenarios, the issues involved are extremely complex. In addition, there are even more options that can be explored, but none are typically suitable for laypeople to attempt on their own. Asset protection is serious business, and even a small mistake could cause big problems. And if you make a mistake while attempting to protect your assets from Medicaid eligibility consideration, you could end up causing yourself to be penalized or denied that assistance when you need it most.

A competent and experienced attorney with expertise in elder law can assist you as you navigate these complex legal waters. He or she can review your current financial situation and work with you to determine the best strategy to effectively protect your estate from being consumed by the high cost of nursing home care. Remember, every family’s needs are unique, and there is no one-size-fits-all solution. You need legal help to ensure that the strategy you select is the ideal one for your needs.

That’s where we come in. Our attorneys have the elder law expertise you need to make sense of even the most challenging asset protection issues. We take the time to understand your concerns and assist you as you work to secure Medicaid eligibility for yourself while protecting your assets so that they can be handed down to your heirs. Contact us today to find out more about Medicaid eligibility and how it impacts your estate planning.

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Paul A. Kraft, Estate Planning Attorney
Paul A. Kraft, Estate Planning Attorney
Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms in Indiana in the area of estate planning as well as business and tax planning.

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.
Paul A. Kraft, Estate Planning Attorney
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