April 6, 2018October 25, 2023

Protecting Assets from Medicaid

If Medicaid ends up needing to pay for your nursing home care, the government will seek to take any assets that you have to pay for its costs. You might be able to create a trust to get around that problem.

One of the realities of aging in America, is that people who need to stay in long-term nursing home care cannot pay for their stays without losing all of their assets. There is nothing left for their children to inherit. They spend everything they have left, and only then will the government pay for their care through Medicaid.

If the elderly person has a home, the government will even seek to claim that and sell it after no one else is living there. That creates an awful feeling for many elderly parents, because they have nothing to leave their families.

There are some ways around this problem, including using a certain type of trust as the Times Herald-Record discussed in “Benefits of Medicaid Asset Protection Trust.”

A Medicaid Asset Protection Trust is a trust that set up specifically to protect assets from Medicaid, while still qualifying an elderly person for Medicaid assistance with long-term care. These are irrevocable trusts and any assets put into them at least five full years before applying for Medicaid are protected. The trusts are not perfect, since the trust settlors cannot use any of the principal in the trusts. However, income can be used.

If you are interested in a Medicaid Asset Protection Trust, talk to an elder law attorney about one and other options you might have.

Reference: Times Herald-Record (March 8, 2018) “Benefits of Medicaid Asset Protection Trust.”

March 22, 2018May 4, 2022

Medicaid Planning

Americans who need long-term care assistance and cannot pay for it, can get help from Medicaid, if they plan ahead.

It seems almost cruel in a way that nursing homes are as expensive as they are. People who have saved well for their retirements and intended to leave something to their heirs in an estate plan, often face steep nursing home bills. If a stay in a nursing home is long enough, then all their savings can be wiped out and there will be nothing left for the heirs.

Many older Americans look around for other ways to pay for long-term care in a nursing home, if they ever need it. Some will be able to purchase insurance for it, but it is expensive and difficult to get. Other people might have to rely on Medicaid for their care as CNBC discusses in “Here’s a surprise source you can tap for long-term care services.”

The big catch with Medicaid is that it is only available for poor people. To be eligible for Medicaid to pay for nursing home care, the patient needs to have fewer than $2,000 in assets. To get around this problem, patients cannot just give all of their assets away to family members when they need to go into a facility. Any such transfers will be deemed fraudulently made and will disqualify them from receiving help.

There are ways around this problem for people who plan ahead. An elder law attorney can help you develop a plan for your assets that will not make you ineligible for Medicaid. This planning must be done years in advance, so do not delay getting an appointment for long-term planning for Medicaid eligibility. Medicaid crisis planning is also available.

Reference: CNBC (Feb. 27, 2018) “Here’s a surprise source you can tap for long-term care services.”

March 6, 2018

Report Finds Problems with Assisted Living Oversight

One way that Medicaid can save money is by paying for assisted living care for seniors who are eligible for it, instead of paying for nursing home care. A new report found that because of a lack of oversight, that is not happening.

Medicaid was not originally designed to pay for seniors' stays in assisted living facilities. However, as more and more money was being spent on nursing home facilities and the costs at those facilities continued to rise, the federal government granted states waivers to use Medicaid funds for the generally less expensive assisted living facilities.

This should have saved the federal government quite a bit of money.

A group of Senators asked the Government Accountability Office to study how the government's money was being used. The results were not good as The New York Times reported in "U.S. Pays Billions for 'Assisted Living,' but What Does It Get?"

Every year the government spends approximately $10 billion on assisted living facilities. The discouraging news? It is almost impossible to determine how much of the money is well-spent and how much of it is not. The GAO found that a lack of regulations and proper oversight made it impossible to get even basic information about patient outcomes and critical events in many states.

This is disturbing since Medicaid is expected to need even more money in the future to pay for the nursing home care and assisted living care of an aging population. If the oversight problem is not fixed, it will be seniors who are most harmed by the problems.

Reference: New York Times (Feb. 3, 2018) "U.S. Pays Billions for 'Assisted Living,' but What Does It Get?"

July 20, 2017May 4, 2022

Medicaid Proposals

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Even though a vote over the Senate’s bill to repeal Obamacare (Affordable Care Act) has been delayed, it is important to know whether or not it affects elders who rely on Medicaid for nursing home care.

At least for the moment, the legislation to cap Medicaid will not proceed. Nor will the full repeal of the Affordable Care Act. There were several proposals that could have had an impact.

In March, the House legislation included limits to home equity as a countable resource and repeal of three-month retroactive coverage. By lowering the limits on home equity, recipients could have been forced to chose between home ownership and Medicaid assistance. Ultimately, the first was removed from the Senate bill and the second was modified to not apply to persons with disabilities and those over 65.

NAELA is also concerned about the misuse of 1115 waivers to limit Medicaid eligibility. Maine has already proposed an 1115 waiver to put limits on annuities and end retroactive coverage. An elder law attorney can help you learn if you or a loved one qualifies for Medicaid and how to do Medicaid planning.

July 19, 2017

Medicaid Facts

Repeal of the Affordable Care Act has been one the biggest news items in recent weeks. Changes to Medicaid in Republican proposals have received a lot of attention, but many people do not know exactly what Medicaid does.

You probably know that Medicaid is the federal government program that provides health care coverage to poor Americans. However, in the debate about the repeal of Obamacare (Affordable Care Act) and possible reductions to Medicaid in various appeal proposals, what often gets lost is exactly what that federal government program for the poor does.

Facts about the program get lost in the media noise.

It is important to know the facts, because only then can you really decide if you are for or against any changes.

NPR recently published a list of some lesser known facts about Medicaid in "From Birth To Death, Medicaid Affects The Lives of Millions," including:

It is very expensive. Medicaid currently takes up approximately 10% of the federal budget. State governments contribute even more on top of that to the costs of the program.
Half of all births in the U.S. are covered by Medicaid. The program has been expanded multiple times to include more and more pregnant women.
Some 62% of nursing home residents have their care through Medicaid.
Disabled people and the people who take care of them are often eligible to receive their care through Medicaid.
Medicaid is a major source of funding for the fight against opioid addiction.

Reference: NPR (June 27, 2017) "From Birth To Death, Medicaid Affects The Lives of Millions."

April 5, 2017February 23, 2022

Medicaid Can you Rely On It?

People who plan to rely on Medicaid, if they ever need long-term care in a nursing home, often make a very big mistake.

Nursing home care is one of the most expensive things facing elderly people. It costs a lot of money to get long-term care in a nursing home.

Many older people do not have the money for it and do not have a realistic way of getting that money. Profit Law Firm provides Medicaid crisis planning.

As a result, they look to the government to pay for that care. The government will step up through Medicaid, but only if the elderly person, who is in need of nursing home care, has no assets.

When seeking to qualify for Medicaid, however, many people make a big, big mistake.

This mistake is discussed in the Pauls Valley Daily Democrat article titled “Misunderstandings create traps in planning.”

The mistake is a simple one to explain, but it is important to make sure you understand it so you will not make it. You cannot give your assets to your children, just before you go into a nursing home, at Medicaid’s expense.

Unfortunately, that is just what many people are planning to do and it will not work.

What is the problem?

Medicaid has a five-year lookback window, which means that the program will look at any asset transfers the applicant (or anyone on his or her behalf) made within five years of needing long-term care.

If those transfers were not made at market value, then Medicaid will not pay for care until the expenses start to exceed the value of the transferred assets. There is a formula to calculate the “penalty period” that will be applied.

This simple mistake is a big source of problems for the elderly. Make sure that you understand it and ask an elder law attorney, if you have any questions about it.

Reference: Pauls Valley Daily Democrat (March 8, 2017) “Misunderstandings create traps in planning.”

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Tag: Medicaid