If your estate plan doesn’t include Medicaid planning and you suddenly find yourself needing to qualify for Medicaid, you might find yourself in a difficult position. Without planning for the possibility, your retirement nest egg might be at risk if you apply for Medicaid. The good news is that it may not be too late for Medicaid planning to help. The Port St. Lucie Medicaid planning attorneys at Kulas & Crawford explain how you may still be able to benefit from Medicaid planning even if you need Medicaid right now.
Why Might You Suddenly Need to Qualify for Medicaid as a Senior?
If you were covered by employer-sponsored or privately funded healthcare insurance during your working years you probably never needed Medicaid. As a result, you likely know very little about the program, including the eligibility guidelines. Moreover, it may never have occurred to you that you would need to qualify for Medicaid as a senior which means you never thought about including Medicaid planning in your estate plan. Now, however, you are faced with the need to cover the cost of long-term care in Florida. At a statewide average of about $115,000 a year for 2021, your LTC bill could wipe out a lifetime of savings quickly. Although you may now qualify for Medicare, the Medicare program won’t help with LTC expenses for a very short time and only under very narrow circumstances. If you kept your private or employer-sponsored healthcare coverage the odds are very good that your coverage also excludes LTC costs. It comes as no surprise that over half of all seniors who need LTC turn to Medicaid for help covering the high cost of that care. Qualifying for Medicaid, however, can be problematic.
Qualifying for Medicaid and the Medicaid “Look-Back” Rule
Medicaid is a federally funded and state administered healthcare program for low-income individuals and families as well as the disabled and aged. Because the program is intended to assist low-income applicants, an income and asset threshold is used to determine eligibility. The asset limit is often as low as $2,000. If the value of your non-exempt assets exceeds that limit your application will be denied. Transferring valuable assets out of your estate when you realize you need to qualify for Medicaid is not an option because of the Medicaid five-year “look-back” rule. In essence, the rule allows Medicaid to review your finances for the previous five years. Any asset transfers made for less than fair market value could be flagged and cause Medicaid to impose a waiting period during which time you will be responsible for covering your LTC bill out of pocket.
Is It Too Late for Minute Medicaid Planning?
Incorporating a Medicaid planning component into your estate plan to plan for the possibility that you will need to qualify for Medicaid in the future is ideal; however, there are some perfectly legal last minute Medicaid planning strategies that may still be able to help you if you suddenly need to qualify and did not plan for that need. One common last-minute Medicaid planning strategy involves converting a non-exempt asset to an exempt asset. Medicaid exempts some assets, when determining your eligibility. The list of exempt assets will vary by state; however, most states exempt a primary residence. If you have a significant amount of cash or a valuable investment account and you still owe on a mortgage, paying down the mortgage can convert that cash/investment account from a non-exempt asset to an exempt asset. Before assuming that it is too late to benefit from Medicaid planning, consult with an experienced Medicaid planning attorney.
Contact Port St. Lucie Medicaid Planning Attorneys
To learn more, please download our FREE solid estate plan checklist. If you have additional questions or concerns about last minute Medicaid planning, please contact the experienced Port St. Lucie Medicaid planning attorneys at Kulas & Crawford by calling (772) 398-0720 to schedule an appointment.
