You learn some rather cold facts of life when you are planning for the future. One of these is the fact that Medicare won’t pay for long-term care. Medicaid will assist with these expenses if you can qualify, and many people are forced to seek Medicaid eligibility.
Most senior citizens who are living in nursing homes receive assistance from Medicaid. A great many of these individuals never had any significant financial need when they were younger. However, when you look at the average earnings of a typical American as compared to the cost of long-term care the numbers don’t add up.
The exact cost of long-term care will vary depending on the area of the country that you’re talking about. Here in the state of New York long-term care costs are higher than the national averages. According to the MetLife Mature Market Institute 2012 survey a private room in a nursing home last year averaged $368 a day in the Empire State.
The average length of stay is around two years and three months. Of course, some people spend considerably more time in nursing homes. The expenses can reach the hundreds of thousands of dollars.
This is why so many people rely on Medicaid late in their lives even if they were enrolled in the Medicare program previously. Because Medicaid is intended for people with limited resources there is an upper asset limit of $2000.
Before you assume that you could never qualify without losing everything you should know that your house up to $802,000 in equity doesn’t count. Personal effects don’t count, and the vehicle that you use for transportation is not considered to be a countable asset. Your wedding ring, engagement ring, and heirloom jewelry would not count either.
When it comes to the countable assets a logical question arises: can you give away assets to qualify for Medicaid?
When you look into the subject of Medicaid you hear about “spending down.” This is the process of divesting yourself of assets in anticipation of applying for Medicaid. You can do this by giving away property and/or living it up.
However, you do have to be aware of the five year look back period. If you give away assets the day before you intend to enter a nursing home you will not qualify for the program.
You have to give away and/or spend your assets at least five years prior to applying for Medicaid if you want to become eligible without any penalty being imposed.
The Medicaid rules and regulations are rather complex, so professional guidance is probably going to be necessary. If you would like to have all of your questions answered feel free to contact our firm to schedule a free elder law consultation.
- Can Medicaid Planning Still Help Me If I Need to Qualify Now? - November 30, 2022
- Should I Tell My Loved Ones the Details of My Estate Plan? - November 23, 2022
- Protecting Assets with an Intentionally Defective Grantor Trust - November 16, 2022