Well maybe yesterday isn’t accurate or fair. How about 5 years ago? That’s right, if you need Medicaid today your planning should have started at least 5 years ago and should have involved guidance from an elder law attorney. Here’s why:
Any long term care in a facility (assisted living or skilled nursing) can cost up to $12,000 a month or more. Without Medicaid, nearly all people, especially middle-class people, cannot afford care. But Medicaid has strict rules about what you can do with your assets and when, such as transferring assets to loved ones. If you transfer assets within 5 years of applying for Medicaid, you could be subject to a period of ineligibility (or in more common terms, a penalty). The biggest problem is that penalty doesn't begin to run until you're actually eligible – so you're already out of money by then. Getting sound legal advice, and getting it early, will help you with asset preservation by making sure you do what you are allowed to do and before it is too late. This is about making sure you have enough left for more than just medical care, it can also be about leaving an inheritance or enough funds for a spouse’s future needs.
Medicaid penalties are more than just financial penalties. We’re not talking about paying a fine. They block you from using Medicaid for a specific period of time, based on the value of the assets in question and the average cost of long term care. Some might think, “I’ll just use my savings until there is no more and then they’ll have to cover me, right?” Wrong. YMedicaid doesn’t have to cover your care if you are being penalized for your previous actions. So applying too early without understanding the consequences can do more damage than not applying at all. Good planning will prevent facilities from going after your home when your loved one runs out of money. It will also prevent them from threatening to discharge your loved one (whether they can actually discharge someone is an entirely different question, but the threat is often scary enough).
Estate recovery sounds like a good thing, doesn’t it? But it’s not a good thing for families of Medicaid recipients. Basically, after a Medicaid recipient and their spouse die, the state can attempt to recover the Medicaid payments back from their estate. The state uses these funds for future Medicaid recipients. During the estate recovery process a home in the deceased’s name can suddenly be subject to a lien. While primary residences often appear to be protected during the Medicaid application process, their protection may disappear when it comes time to try to recover from the estate. Some simple planning can eliminate this problem.
We are always available to provide advice as to Medicaid asset planning and preservation, so we urge you to talk to us before it is too late to do effective planning.
Archer Brogan Can Help
For More Information Contact this office (609) 842-9200