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 find yourself in an untenable situation at some point in time. The fact is that the majority of senior citizens will eventually need long-term care, so if you make no advance plans you could be unprepared for the cost when the time comes. With this in mind, it is important to consider Medicaid planning, so let our Charlotte Medicaid attorney explain what you need to do.
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 angle toward Medicaid eligibility.
What is Medicaid?
Medicaid is a program that is theoretically 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 that must be met if you are going to qualify for Medicaid. This can automatically seem like it will preclude you from eligibility, but the fact is that not all of your assets count toward this limit.
Your vehicle, your place of residence, and many of your personal possessions are not countable in a Medicaid eligibility context. The healthy or community spouse is also allowed to keep half of the other community assets up to a limit of $120,900 as of this writing.
Beware of the five-year “look back” period
Medicaid is only available to people with very limited financial resources. There is a $2000 limit on countable assets. As a result, Medicaid planning can involve gift giving. You may be able give your loved ones their inheritances before you apply for Medicaid.
The rules surrounding Medicaid eligibility are somewhat complex, and there is a five-year “look back” period to consider as well. This involves a penalty for divesting yourself of certain resources within a five-year period of applying for Medicaid. Your eligibility may be delayed if you give away assets within five years of applying. This can lead to the belief that Medicaid cannot help if you do not act well in advance; but there may still be options even if you have not planned ahead.
As a result, employing a strategy that leads to Medicaid eligibility in anticipation of the necessity for long-term care requires a certain amount of savvy. The best way to go about it is to discuss the matter with an experienced Charlotte Medicaid attorney.
It is never too late for Medicaid planning
Medicaid planning may seem like something that would have no relevance to you if you are going to qualify for Medicare at the age of 65. This is understandable to some extent, but Medicaid planning can, in fact, be important because Medicare does not pay for long-term care. Medicaid will assist with long-term care expenses.
Benefits available for the healthy spouse
One very important thing to understand is the fact that your spouse would be able to retain a certain store of property without impacting your Medicaid eligibility. In addition to other planning options, the healthy spouse is entitled to a Community Spouse Resource Allowance. This is equal to half of the shared countable assets.
There is a limit on the upper end, and there is also a minimum Community Spouse Resource Allowance. Our practice is in North Carolina. In our state, the maximum Community Spouse Resource Allowance in 2015 is $120,900. The minimum is $24,180, so the healthy spouse could keep no less than this amount, even if it is more than half of the shared countable assets.
In addition to the above, your home is not considered to be a countable asset. If you are not married, there is an equity limit. However, if you are married and your spouse is remaining in the home, there is no equity limit at all.
If you have questions regarding Medicaid planning or any other elder law 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 for individuals in Kentucky at (606) 324-5516 (Ashland, KY) or at (859) 372-6655 (Florence, KY).