Most people never give much thought to the likelihood that they’ll one day need nursing home care, so relatively few ever take the opportunity to plan for those expenses. Unfortunately, that can be a tremendous mistake, since the costs associated with long-term care can quickly consume many estates. That, coupled with the fact that most Americans have only modest retirement savings, can make it difficult for many seniors to cover nursing home expenses. That’s why so many seniors rely on Medicaid to finance their long-term care. To get those benefits, however, you need to meet the program’s long-term care eligibility standards. A Medicaid lawyer can be an invaluable resource to help you accomplish that goal.
The Cost of Care
The cost of nursing home care has been steadily rising for many years now, to the point where many seniors simply cannot afford to pay those expenses on their own. Across the country, care often costs more than $200 a day – an amount that can cost seniors $80,000 a year or more. As you might imagine, few Americans have the kind of resources needed to cover those types of costs. To make matters worse, most families no longer have the financial flexibility they would need to help their elderly loved ones manage that burden.
Relying on Medicaid
Without the means to cover long-term care costs on their own, seniors are often left in a precarious position. Some can turn to family and friends for assistance, but that’s become an increasingly rare phenomenon. Veterans may be able to obtain assistance through VA benefit programs. However, large numbers of seniors end up struggling to find the answers they need. Some are even shocked to discover that Medicare provides no coverage for their long-term care needs.
The fact is that Medicare is all but useless for nursing home coverage. To be fair, it will cover the costs of care in some instances – but that help is limited and short-lived. In fact, Medicare coverage for nursing home care lasts for no more than one hundred days. Since most seniors end up spending months or even years in that type of care facility, Medicare’s assistance is no real help at all. No, if those seniors need government assistance to help cover the cost of long-term care, they need the help that only the Medicaid program can provide.
The fact is that Medicaid has become the most important source of funding for nursing home patients across the United States, and its benefits enable millions of seniors to receive the long-term care they need without the constant anxiety that comes from worrying about how the bills will get paid. Without this important program, those seniors might be denied access to the important health care and daily living assistance they need to maintain their dignity in a safe and comfortable manner.
That doesn’t mean that qualifying for Medicaid is easy. For many seniors, it can be a real challenge. The eligibility standards are tough, and many seniors find that they need to make certain adjustments to meet the requirements. In addition to age, disability, and residency requirements, seniors also need to meet the most stringent of income and asset limitations. As a rule, the income limits are easy to deal with – even when the senior has more monthly income than the program allows. In those instances, the creation of a Miller trust can help to ensure that the income limits are met by diverting excess money into the trust.
The asset limitations are more difficult to manage. Seniors who want to qualify for Medicaid are restricted to no more than $2,000 in countable assets. While that assert limitation excludes certain types of wealth like the family home, one vehicle, and prepaid burial plans, it encompasses most other forms of property. As you might imagine, even seniors of relatively modest means often struggle to meet those requirements – which can leave them facing some harsh choices if they want to secure those Medicaid benefits. Many end up using spend-down strategies to try to lower the value of their estate to meet those asset limitations. There is a better way to address this challenge.
Medicaid planning can be a more effective way to ensure that you’re eligible for the benefits you need when that need arises. A Medicaid attorney can help you with strategies designed to reduce the size of your estate to ensure that you can meet those tough program eligibility standards. For example:
- A lawyer can assist you with gifting strategies that can transfer wealth to your loved ones in a way that lowers your estate value. This can help you to not only qualify for the benefits you’ll someday need, but also reduce the impact of estate taxes.
- Irrevocable trusts can be used to accomplish the same thing, while providing the added benefit of offering estate tax mitigation and asset protection from creditors and litigants.
- These types of strategies should be used years in advance of any nursing home need, of course, to avoid running afoul of the Medicaid program’s five-year look-back provisions. Asset transfers made within the five years prior to your program application could leave you subject to eligibility penalties lasting months or even years. To avoid those penalties, Medicaid planning should always be done more than five years before you think you might need to apply for benefits.
The Help You Need
The important thing to remember is that you don’t have to leave yourself open to application difficulties or potential ineligibility penalties. By working with a Medicaid lawyer, you can more effectively manage your application process and ensure that you get the benefits you need to ensure that you have the right type of long-term care. At Frank & Kraft, Attorneys at Law, our legal experts can help you to resolve these challenges with sound Medicaid planning strategies that secure eligibility while preserving at least some of your assets. To learn how our Medicaid experts can help you to address your long-term care eligibility concerns, 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.