Medical care can be quite costly, especially for the long term. When we refer to long term care, we are generally referring to care in a nursing facility, or home care in the home with home attendant services. Insurance benefits generally do not cover such long term care. Medicare benefits (available to all Americans over age 65, or those under age 65 who qualify based on disability) will provide financing ONLY for the short term care in a facility or at home. Once those benefits are exhausted, there are limited means to finance continued long term care- with long term care insurance, or with one’s savings. Medicaid benefits are available to individuals who are over age 65, or blind, or disabled, and meet financial eligibility requirements. Home care benefits are available for up to 7 days a week, 24 hours a day, and nursing home benefits for care in a facility are both examples of the types of care Medicaid benefits will finance. Planning in advance of needing any type of long term care is advisable to protect the value of one’s home, one’s savings, and part or all of one’s income. It is recommended that one seek the advice of an attorney when planning to protect assets from the cost of long term care. If no advance asset protection planning has been done in advance of needing care, a portion of one’s assets can be protected from having to be spent on care. Planning in advance can result in protection of most or all of one’s assets from having to be spent on the cost of care. Call our office for an appointment to discuss a plan to protect your assets and income from future long term care costs!
The decision to place a loved one in a nursing home is difficult and one which many families unfortunately face at one time or another. If long-term care is necessary, one may finance such services with long term care insurance benefits, by paying privately, or if financial and medical eligibility requirements are met, by applying for benefits through the Medicaid program.
To be financially eligible for Medicaid home care services, an individual can have no more than $14,850.00 in assets. Assets that count towards Medicaid eligibility include all non-qualified assets such as checking, savings, cash value of life insurance, annuities, savings bonds, etc. If assets are titled in joint ownership, the full value of the account is considered an available, or countable resource for Medicaid eligibility. The assets of a non-applying spouse are also considered when determining eligibility for benefits.
There is a lookback period of five years for nursing home Medicaid benefits. This means that when an application is submitted, five years of all financial information must be provided, and if assets were transferred out of your name or your spouse’s name to a third party must be noted and explained with documentation. Transfers or gifts may lead to a penalty period, during which time Medicaid will not pay for the nursing home. Mistakes in transferring money out of an applicant’s name can be costly and you should consult with an experienced elder law attorney when contemplating nursing home care for a loved one.
When deciding if home care services are right for your loved one, cost is certainly one of the primary concerns. Staying at home with home attendant services twenty-four hours a day, seven days a week is less expensive than care in nursing home facilities, however paying privately for home care can quickly deplete one’s income and savings as the cost for paying privately for home care services can be upwards of $7000.00 per month.
Medicaid benefits are available to qualifying individuals for long-term home care assistance for up to 7 days a week, twenty-four hours a day. With proper legal advice, it is possible to protect one’s assets and income and qualify for home care assistance through the Medicaid program.
You should not assume based on word of mouth that your loved one would not qualify for home care benefits. Should you or your loved one require home care assistance, you should review your circumstances and eligibility for these benefits with an attorney who practices in the area of elder law.
In order to receive home care services through the Medicaid program, an applicant must have income and assets under the allowable limits, which are determined annually by the Medicaid program. For 2015, an individual can have no more than $14,850 in non-qualified assets in her or her name and no more than $825 a month in income, plus the cost of any health insurance premiums. For individuals over 65, there is an additional allowance of $20 per month.
If an individual has income higher than this threshold, they are considered to have “surplus” or excess income which must be spent down before they will be eligible for Medicaid services. In years past, in order to receive services, the surplus would have to be paid on a monthly basis to the Medicaid agency.
In more recent years, while many individuals may find themselves with more income than the Medicaid allowance, they can still qualify for the program with proper planning and advice. Attorneys, for example, often use pooled income trusts in order to shelter the excess income of a Medicaid applicant or recipient. Pooled income trusts are vehicles that allow a person to deposit their surplus income into an account that is then available for the Medicaid recipient to pay bills in his or her name.
While pooled income trusts are an effective tool for many clients, they do not make sense for everyone. You should consult with an attorney before deciding which route makes the most sense for your individual circumstances.