The Medicaid waiver program can come into play if you need long-term care toward the latter portion of your life. Before we look at the details, we should provide a general overview so that you understand the lay of the land. The majority of senior citizens will eventually need long-term care so if you make no plans you could be unprepared for the cost when the time comes. These costs make it important to consider Medicaid planning so let our Medicaid attorneys explain what you need to do.
What is Medicaid?
Medicaid is a program that is intended to provide medical care for people who don’t have the financial resources to pay for their care. As a result, there is a $2000 asset limit to qualify for Medicaid, but not all assets count toward this limit.
Your vehicle, your place of residence, and many of your personal possessions are not countable for Medicaid eligibility. The healthy or community spouse is also allowed to keep half of the community assets (up to limit $123,600 currently).
Limitations of Medicare
If you have worked throughout your life, you have seen a significant chunk of your earnings go toward the FICA tax. The contributions that you make entitle you to Medicare coverage after you earn enough retirement credits.
In 2018, you earn one credit for every $1320 that you earn. You can earn up to four credits per year. If you accumulate at least 40 credits throughout your working career, you will qualify for Medicare at the age of 65. Medicare can help a great deal if you need medical care, but it does not pay for long-term care. Living assistance counts as custodial care rather than medical or convalescent care, and Medicare does not pay for custodial care.
Long-Term Care Costs
The long-term care coverage gap is significant because living assistance is very expensive. The average annual cost for a private room in a nursing home exceeds $90,000. Assisted living communities are also quite expensive. Medicaid is a government program that will pay for long-term care. Because it is a need-based program, many seniors give assets to their loved ones with future Medicaid eligibility in mind.
However, you must act in advance in an informed manner because there is a 60-month look-back. Your eligibility may be delayed if you give away assets within five years of applying for coverage. Medicaid regulations do permit certain types of gifts without penalty even within the five-year window, but how you make these gifts matters so it is wise to discuss planning with an elder law attorney.
What is a Medicaid Waiver?
Now that you have some background information, we can look at the Medicaid waiver. Many people can receive the living assistance that they need in their own homes. In-home caregivers are not free by any means, but in-home care can be much less expensive than full-time residence in a long-term care facility.
The government would like people to receive help in their homes if possible because it is less expensive. To facilitate this, the government implemented the Medicaid Home and Community-Based Services waiver program. This program helps eligible seniors pay for in-home care. It is called a “waiver” program because the asset and income limits are relaxed to allow more people to qualify for coverage.
Understanding the reality of Medicare and Medicaid
One of the reasons why some people fail to plan for the possibility of incurring long-term care expenses is because they are under the impression that Medicare will take care of everything once they reach the age of eligibility. In fact, Medicare does not cover long-term care expenses so you’re on your own unless you can qualify for Medicaid and many people do look toward Medicaid eligibility. If you have questions, speak to one of our Medicaid attorneys.
Medicaid Planning as a Long-Term Care Solution
In the elder law community, the high and rising costs associated with long-term care are a major source of concern. These expenses are something to keep in mind when you are making plans for the future, and if you stick your head in the sand you may eventually find yourself in an untenable situation.
Join us for a FREE seminar today! If you have questions regarding Medicaid waivers or any other Medicaid planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (704) 944-3245 (Charlotte, NC, or Huntersville, NC) or for individuals in Kentucky at (606) 324-5516 (Ashland, KY) or at (859) 372-6655 (Florence, KY).
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
- What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
- How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
- Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022
