Like many people, you may never have imagined you would need to qualify for Medicaid benefits. Now, suddenly, you find yourself in your retirement years, facing a huge long-term care bill, with Medicaid providing the only potential relief in sight. You are not alone. Almost half of all seniors eventually find themselves in a situation where they need to qualify for Medicaid benefits because of the high cost of long-term care. The fact that the Medicaid program will help cover those costs is certainly good news. What is not good news is the fact that you could lose assets before Medicaid jumps in and starts helping. This is why you should – ideally – include Medicaid planning in your estate plan long before you think you might need the benefits offered by the program,.
Will You Need Long-Term Care?
You may not wish to dwell on the possibility; however, the reality is that the longer you live the better the odds are that you will eventually need long-term care. The same applies to your spouse. At age 65 you both stand about a 50-50 chance of eventually spending time in a long-term care facility. If you are still here at age 85 those odds jump to a 75 percent chance with an average length of stay of 2.5 years. If you are married, keep in mind that your spouse will be facing the same odds as you, making it even more likely that you will be faced with the need to pay for long-term care at some point during your retirement years.
What Will Long-Term Care Cost You?
Nationwide, the average cost of a year stay in a long-term care facility runs just over $80,000 as of 2016. Residents of the State of Florida can expect to pay a bit more than the national average. In Florida, the cost for a year stay in a semi-private room in a long-term care facility about $88,000 with a private room costing about $96,000 per year as of 2015. At those figures, you can expect to pay over $250,000 for an average stay in a long-term care facility in Florida.
What about Your Health Insurance Policy and/or Medicare?
Although people often fail to realize it, most private health insurance policies do not cover long-term care costs unless you purchased a separate long-term care rider at a considerable additional cost. What about Medicare? Unfortunately, Medicare only covers long-term care costs in very specific circumstances and then only for a relatively short period of time. This is where Medicaid comes into the picture because Medicaid will cover the costs associated with long-term care. The “catch” is that you must first qualify for the benefits.
Medicaid Eligibility Guidelines
Medicaid is intended to provide healthcare coverage for lower income individuals and families. For this reason, the Medicaid program has both an income and an asset limit. As a retiree, your monthly income may not be an issue; however, your assets likely will. In Florida, you cannot have countable assets valued at more than $2,000 to qualify for Medicaid. If your assets exceed the limit you will essentially have to deplete them before being eligible for Medicaid benefits. Worse still, the Medicaid rules effectively prohibit you from transferring assets out of your estate in an effort to reduce the value of your estate anytime in the five year period leading up to your application for benefits. Imagine spending you entre life working hard and saving money just to see it all disappear because you are faced with a huge long-term care that isn’t covered by any insurance program? There is a light at the end of the tunnel though in the form of Medicaid planning. Medicaid planning incorporates legal tools and strategies into your estate plan that are aimed at protecting your hard-earned money while also ensuring that you will be in a position to qualify for Medicaid benefits if you do need them in the future.
If you have additional questions about Medicaid planning or estate planning in the State of Florida please contact the experienced estate planning attorneys at Kulas Law Group, P.A. by calling 772-398-0720 to schedule an appointment.