Most people are aware of the fact that the Medicaid program is a government health insurance program that is for financially needy people who cannot get health insurance any other way. The majority of working Americans are never going to qualify for Medicaid, so it could be completely off your radar as you are traversing your career path.
When it comes retirement planning, in the back of your mind, you recognize the fact that you will become eligible for Medicare coverage as a source of health insurance when you reach the age of 65. It would be logical to assume that the health care issues that seniors typically face would be covered by the Medicare program.
However, unfortunately, the real world does not work this way, though many people would question the situation. Living assistance is something that most of us would consider to be health related, and the majority of senior citizens will someday need help with their activities of daily living. Be this as it may, Medicare does not pay for long-term care.
As you might imagine, long-term care is extremely expensive. The average annual charge for a private room in a nursing home is just over $90,000 at the present time. We practice law in the Indianapolis, Indiana Metropolitan area, and the costs here are more or less right in line with the national average.
Medicaid and the Look-Back
Now that you have the background, we can cut to the chase as it were: Medicaid does pay for long-term care, and this is why it is relevant to many senior citizens. Since it is a need-based program, you can’t qualify if you have significant assets in your own name. The limit on countable assets is just $2,000 for an individual applicant.
To qualify for Medicaid, you could give away assets to your loved ones before you apply, but there is a five-year look-back. The gift giving has to be completed at least 60 months before you submit your application. If you don’t adhere to this look-back time frame, and you give away assets within the five year window, your eligibility is delayed, and you have to pay out-of-pocket.
There is an exception to the rule with regard to the look-back. In many cases, an adult child will act as a caregiver for his or her parent. The child will often live in the parent’s home. If an adult child caregiver has been living in the home of a Medicaid applicant for at least two years, the applicant could give the home to the child. This transfer of ownership would not violate the five-year look-back.
Medicaid Planning Consultation
Everyone should prepare for potential long-term care costs, and Medicaid is the solution for most people. If you would like to devise a plan that leads to Medicaid eligibility at the right time, send us a message through this page to request a free consultation: Indianapolis IN Elder Law Attorneys.