Nursing Care Crisis & Medicaid Planning

Nursing Care Crisis & Medicaid Planning

Is your loved one suddenly facing a move to a nursing home due to a catastrophic illness or injury?  Perhaps a chronic condition has finally become too difficult to manage at home.  A common myth exists that Medical Assistance (Medicaid) is only for “poor people”.  If you are a middle class family facing $100,000/year or more in nursing home costs, Medicaid can help YOU!

There are a number of considerations to keep in mind when planning for Medicaid.  The first consideration is that Medicaid does not pay for care in a personal care home or assisted living facility.  An individual must be receiving care in a skilled nursing facility (nursing home) in order to receive Medicaid.  If your loved one is a wartime Veteran, or spouse of a wartime Veteran, there may be assistance available to help pay for personal care.  Please see the section about Veterans Benefits for more information.

Medicaid has set guidelines for the amount of total resources that an individual or couple may have in order to be eligible. In the situation of a couple, one person can receive Medicaid when living in a nursing home while the spouse remains in the community.  The assets of both will be considered during the application process.  Medical or financial professionals may tell you that you have to “spend down” your “excess” resources before you can qualify for assistance, but that is only partly true and could mislead you to overlook an opportunity to preserve a substantial portion of the family estate, even at a time of crisis without advance planning.   Current law allows for the use of specialized tools and plans to reallocate some of these “excess” resources for the benefit of the community spouse or family.  This reallocation of resources permits the individual desiring the Medicaid benefit to become eligible sooner, saving the family worry as well as thousands of dollars.

Medicaid also has strict rules about “gifting” or giving away money or property.  An amount given away in excess of $500 in any one month, over the 5 years previous to the application, is considered a gift and the applicant will be assessed a penalty period during which Medicaid will not pay for care.  This situation creates a quandary for families who were unaware of the rules, have already spent most of their resources, and now face bills which will not be reimbursed.   Our staff has the ability to plan around gifts that have already been given, providing that all resources have not already been spent.  Examples of “gifts” are college tuition payments, selling a car or property to a family member at below market value,  or paying “rent” if you are being cared for in a family member’s home (please see the section on Family Caregiver Agreements for more information).

Once an individual qualifies for Medicaid, it must be renewed annually.  Certain life situations, such as receiving an inheritance, can result in discontinuation of benefits for a period of time.  Specialized planning, which takes into account an individual’s life situation as well as their goals can help maximize government benefits and protect assets.  Just as physicians specialize in a particular area of medicine, attorneys can also specialize in the practice of law.

Since the IRS, Veterans Administration, and Department of Public Welfare all have different rules, it is important to make sure that your attorney has specific knowledge about all of these rules and how they interact with each other.  At Keystone Elder Law P.C., we can help you understand the impact of all of these rules for YOU, and provide the tools and support to prepare and carry out a plan to improve health care, reduce stress, and save money.

For additional information or questions, give us a call at 717-697-3223