Medicaid Changes Make Pre-Planning Essential

Chronic illnesses and injuries leave countless Americans disabled and in need of long-term custodial care, which could easily cost over $50,000 per year.  Traditional health insurance plans do not cover custodial care because it is not “medical” treatment.  Similarly, the Medicare program does not cover custodial care because it is not medical treatment.  So, what options remain?

You can pay the cost yourself; quickly exhausting what you’ve taken a lifetime to save.  Or you could try to qualify for Medicaid.  However, Medicaid is a needs tested program and, in order to qualify, you cannot have “countable resources” exceeding $2,000.  If you give away assets to get down to that $2,000, Medicaid penalizes you and denies you benefits for a period equal to the amount of the gift divided by the cost of care.

There are ways to avoid these hardships. If you plan ahead you can avoid the harshness of the law.  If you can give away assets two and one-half years before you have a need for benefits, there would be no penalty period.  In fact, you would not even have to tell Medicaid that you had made that transfer because it was so long ago. What many do not know is that there are also planning options available within the two and one-half year look back period.  
If you think there is a chance that you may need long-term care down the road and you want to preserve some of your assets for yourself, your spouse, or your descendants, pre-planning is essential. A qualified estate planning and elder law attorney can help you avoid the harsh application of the current and new Medicaid rules.

Philip M. Flanigan is a member of WealthCounsel, LLC and has been engaged in the practice of law since 1986. For more information call 559-435-0455.

 

©2011 Phillip M Flanigan Attorney at Law