Many people expect Medicaid to pay for some or all of their future long-term care costs. But Medicaid eligibility is complicated. Using the wrong strategies could prevent you or your spouse from qualifying. Even worse, you might qualify but face a lengthy penalty period before actually receiving benefits. You could watch your assets being depleted by expensive long-term care, assets that you expected to leave for your spouse or heirs. Proper Medicaid planning might help you protect your assets and provide for your spouse.
Paying for Long-Term Care
There are usually three ways to pay for institutional care:
- Self-pay,
- Long-term care insurance, or
- Medicaid.
In fact, Medicaid pays for more than 50% of long-term care in the United States. Many people have no choice but to hope Medicaid will cover their care. Few people have long-term care insurance.
Nursing care in the Southeastern Pennsylvania area can range from $11-16,000 per month Nest eggs can vanish quickly if self-pay is your only option.
How Medicaid Planning Works
To qualify for Medicaid, your countable income and resources must fall below Medicaid’s limits. When you exceed those limits, you generally will not be eligible for benefits until your income and resources are reduced.
An experienced Medicaid planning attorney can review your financial situation and suggest ways to qualify for Medicaid without losing everything. For example, you might transfer your assets to an irrevocable trust with someone else acting as trustee (depending on how far ahead you are planning). Your attorney can suggest other ways to protect your assets so that you can leave them for your heirs.
However, married Medicaid applicants also should be concerned about their spouse’s future needs, both financial and physical.
Providing for Your Spouse’s Future Also
Some couples find themselves in a difficult situation where one spouse needs long-term care, and the other does not – for now. So, while they need to pay for one spouse’s care, they can’t ignore the non-institutionalized spouse’s future long-term care needs and quality of life. With the proper Medicaid planning strategies in place, both spouses can get the care they need.
Your attorney can also explain Medicaid’s Spousal Impoverishment Rules and Community Spouse Resource Allowance. These offer protection for the spouses of people who need nursing home care.
Other strategies used in Medicaid planning include:
- Spousal asset and income transfers,
- Annuities,
- Irrevocable trusts, including Medicaid Asset Protection Trusts.
Medicaid’s look-back period is an excellent reason to use a Medicaid planning attorney and to start Medicaid planning now. Pennsylvania uses a five-year look-back period. This means that Medicaid heavily scrutinizes any financial transactions and property transfers made within the five years prior to your application date. Some transactions are permitted, but your Medicaid planning attorney can advise you on the right strategies to use.
Don’t Wait to Discover Your Medicaid Planning Options
Trust your future to someone who has deep experience working with Medicaid.
Attorney Robert Slutsky was one of the first lawyers in Pennsylvania to focus on elder law issues. Since 1992, he has helped countless people plan for their future, set up proper estate plans, plan to protect assets and care for loved ones, and successfully apply for Medicaid.
Please give us a call at (610) 940-0650 or schedule a consultation on our website. We help clients throughout Chester, Delaware, Montgomery, Bucks, and Philadelphia Counties, and beyond.
For a listing of skilled nursing and rehabilitation facilities, please check out our Chester County PA Elder Law Directory and Senior Guide online at: