It is said that a little knowledge is a dangerous thing, and this can be a factor when people obtain incomplete information about nursing homes and Medicaid.
The Medicaid program is equipped to pay for long-term care. Since Medicare does not pay for living assistance, Medicaid provides a solution for many elders who were once qualified for Medicare coverage.
Many people are aware of the fact that Medicaid is a program that is intended for people with virtually no financial resources. There are those who assume that the state will take your assets if you apply for Medicaid so that you will have nothing left.
In reality, this is not how it works. Medicaid is a need-based program, and seniors who want to obtain eligibility must be able to prove that they have very limited assets. In fact, the limit on countable assets is just $2,000 for an individual.
People who are aiming toward Medicaid eligibility often give assets to their loved ones before they apply. This is called a Medicaid spend down in geriatric circles.
You cannot simply hold on to your assets with the idea that you will give them to family members if and when you need long-term care. There is a five-year look-back. The program evaluators will examine your financial transactions going back five years when you submit your application.
If you gave away assets within this five-year period, you would be deemed ineligible. Medicaid would not literally take your assets, but you would be forced to pay for your nursing home care out-of-pocket until you waited out a penalty period.
The duration of the penalty would be based on the amount that you gave away during this five-year period. For example, if the annual charge for a year in a nursing home averaged $90,000, and you gave away $180,000, you would be ineligible for Medicaid coverage for two years.
We should point out the fact that Medicaid would seek reimbursement from your estate after your passing if you qualify for coverage. However, if you take the right steps, your family will already own your resources, and there will be nothing to attach.
Careful and informed advance planning is the key to nursing home asset protection. If you would like to learn more about Medicaid planning, download our in-depth special report.
The report is free, and you can visit this page to access your copy: Indianapolis IN Medicaid Planning.
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Long-term care costs are relevant to everyone, because seven out of every 10 seniors will someday need help with their day-to-day needs. If you stick your head in the sand as you hope for the best, you may be in a difficult position toward the end of your life.
Our firm can help if you would like to take action. We offer free consultations, and we would be glad to answer your questions and help you understand your options.
To set up an appointment, send us a brief message through this page: Indianapolis IN Elder Law Attorneys.