Many senior citizens may need the services of a nursing home or at-home care at some point in their life. You might assume that government assistance or health insurance will step in and cover the cost if you cannot afford these services. Unfortunately, neither health insurance nor Medicare covers long-term care. Because obtaining long-term care insurance can be very expensive, Medicaid could become your only option.
Medicaid coverage is not a given, however. If you have assets or recently transferred assets, Medicaid may determine you do not qualify for coverage until a certain amount of time has passed. If this happens, you and their family can face significant nursing home bills. If you cannot pay, nursing homes may take you to court to get reimbursed.
What steps can you take to avoid this? First, we need a better understanding of the timelines – known as lookback periods – that can affect your eligibility. When seeking Medicaid benefits, you must submit an application to your local Medicaid office. As part of this process, the state will look at any money or property you transferred within a the lookback period. In Pennsylvania, the lookback period is five years.
Gifts made within the lookback period can have serious consequences. If you have not engaged in appropriate asset protection planning, you may not qualify for nursing home care. The result is that many elderly individuals must then spend down a significant portion of their savings and liquidate their assets to pay privately for their care before Medicaid starts covering anything. If a person no longer has resources and is subject to a disqualification penalty period, family members may have to step in and bear these costs on their own.
So, what can you do? The answer is to start planning as soon as is practical. Speak with an attorney that can help you with your Medicaid planning. There are various options to consider. By way of example:
Medicaid Asset Protection Trust — One common approach is placing assets in a Medicaid Asset Protection Trust. You may be able to use this to protect various assets such as stock accounts, savings, a home with unprotected equity, and much more.
Exempt Transfers of assets – an attorney can help you understand if certain transfers are permissible under Medicaid rules without triggering a penalty period.
Call (570) 784-4654 to discuss your Medicaid plan with one of our Certified Medicaid Planners on staff.
