By far the largest expense facing us as we age is the cost of long-term care. 24/7 in-home care can easily exceed $400 per day. Assisted-living costs can be more than $4,000 per month. Nursing home care averages more than $5,200 per month in South Carolina. As a result, most families will run out of their life-long savings paying for long-term care.
Up to 70% of all nursing homes residents in South Carolina are receiving Medicaid benefits to pay for their nursing home care.
Medicaid laws are complex and are constantly changing. If you wait to do Medicaid planning, the Medicaid laws may change in a manner that takes away many available strategies for protecting resources.
Medicaid is a needs-based program. In order to receive Medicaid benefits to pay for nursing home care, there are three eligibility criteria that must be satisfied. They are:
The recipient must have health issues which require assistance in two of the five activities of daily living (ADLs). The 5 ADLs are: feeding, bathing, dressing, incontinence and ambulation.
The income of the Medicaid applicant must be less than $2,022 per month. The spouse’s income is not counted. If the income is more than $2,022, an Income Trust must be established. (Click here for an explanation).
Countable resources must be less than $2,000 for an individual and $68,480 for a couple (Click here for an explanation). By using one or more of the strategies listed below, the excess assets can be reduced to below the resource limit of $2,000 for a single person and $68,480 for a couple, so that the person can become eligible for Medicaid. The assets that are transferred pursuant to one of these strategies do not have to be used to pay for the nursing home and are often referred to as “protected assets”. These “protected assets” can instead be used to enhance the quality of life of the Medicaid recipient or the recipient’s spouse. The assets that remain at the time of death can be made available as an inheritance to family members or others.
Medicaid Planning is the process of reducing the countable assets of a person seeking Medicaid benefits below the resource limit so they can qualify for Medicaid. In addition, Medicaid planning is sometimes necessary to protect the home.
There are a number of strategies to accomplish this goal. All of the strategies are authorized and permitted by federal law.
The strategies include:
Spending the assets for the benefit of the person seeking Medicaid, or his/her spouse;
Purchasing exempt assets;
Lending money to trusted persons;
Transferring assets to a spouse, disabled children, or child caregivers;
Transferring assets to trusted family and friends.
In addition to helping qualify the ailing spouse for Medicaid, Medicaid Planning is also a tool that can qualify the healthy spouse for Medicaid if nursing home care is needed for the healthy spouse in the future. The strategies are the same as those used to qualify the ailing spouse for Medicaid.
Transferring assets to achieve Medicaid eligibility is not a matter of simply giving away assets. Any assets given away within 5 years of entering a nursing home will result in a period of ineligibility if the giving away of assets is not done properly. The period of ineligibility depends upon the amount of assets given away and begins when the person is eligible for Medicaid but for the transferring of assets
If someone is ineligible for Medicaid as a result of gifting, the consequence is that Medicaid will not pay for the nursing home care. This can be a real problem if the gifted assets are no longer available as there will be no assets to pay for the nursing home unless family members pay the nursing home bill. If the children and family members are unable to pay the nursing home bill out of their funds during the period of ineligibility, the disastrous situation of a person needing nursing home care but with no money available to pay for the care will occur.
The sooner Medicaid planning begins, the sooner more of your assets can be protected. In fact, any assets transferred more than 5 years before Medicaid benefits are sought are completely protected from having to be used for nursing home care. For every month that Medicaid planning is delayed, the amount that can be protected may be reduced by up to $5,022.
There are 4 Medicaid programs:
Nursing home care,
Home waiver services, and a
Medicaid health insurance card.
In addition to Medicaid benefits being available for nursing home care, there is also a program that pays for limited home care. The eligibility requirements are the same as those for nursing home Medicaid, including the limits on transferring assets to achieve eligibility. The benefits are a Medicaid card that can be used to pay for almost all medical expenses, including prescription drugs, and for an aid to come to the home to provide custodial care for up to 20 hours per week. Adult day care may also be paid by Medicaid.
Medicaid planning, as practiced by our firm, is much more than simply protecting assets:
We help clients determine whether a person should be cared for at home, in an assisted-living facility, or in a nursing home.
We assist our clients in evaluating care facilities, developing facility admission strategies, and making sure the client’s rights are protected in the facility.
We work with our clients by helping them receive the best care possible.
We can help you arrange for evaluations for the diagnosis of dementia or other illness or help you ensure that the care facility is as safe as possible for the client.
In short, we help clients deal with the financial, physical, emotional, and familial issues that arise in helping people who need care.
The typical client who sees us for Medicaid Planning does so because:
His or her spouse or loved one is already admitted to a nursing home, is in a hospital because of sickness or illness, or has been told by his or her doctor that he or she now needs 24/7 care. This client is concerned about the $50,000 or more a year cost of nursing home care and would like Medicaid to help pay for that care.
The client or his or her loved one will be applying for Medicaid, or is already receiving Medicaid benefits and wants to protect his or her home.
Nursing home care is not imminent, but on the horizon, and the client wants to develop a strategy so that he or she will be prepared when that day comes to receive Medicaid benefits in a way that he or she can protect as much of his or her assets as possible. Medicaid planning at this time also provides the client and family with peace of mind in knowing that if the day comes when long-term care is needed, a plan is already in place to protect assets and to implement a care plan that will enhance their quality of life.
As an experienced Medicaid planner, for over 16 years Dennis Christensen is dedicated to protecting your assets while helping to ensure that you get the best care that you can get when you need it most. For a consultation with Dennis’ firm, contact our law office today.
For more information and Frequently Asked Questions (FAQs) about Medicaid Planning, click here.
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