Failing to consider the need to qualify for Medicaid as a senior can put your assets at risk during your retirement years. If you suddenly need to qualify and failed to plan ahead, however, Medicaid planning may still be able to help you. While it is certainly best to plan for Medicaid eligibility, you may be able to use some last-minute Medicaid planning strategies to protect some of your assets. The Vero Beach Medicaid planning attorneys at Kulas & Crawford explain last-minute Medicaid planning strategies.
Why Might You Need to Qualify for Medicaid?
If you find yourself in need of the type of care that can only be provided by a long-term care facility, you are hardly alone. At retirement age (age 65) we all stand close to a 70 percent chance of needing some type of long-term care (LTC) services before the end of our lifetime. As you have undoubtedly discovered, the cost of that care is not cheap. Nationwide, the average cost of a year in LTC for 2020 was over $100,000.
Like many seniors, you may rely on Medicare to pay for most of your healthcare expenses; however, you won’t be able to turn to Medicare for LTC expenses because Medicare won’t cover them. Neither will most private health insurance policies unless you purchased a separate long-term care policy. Not surprisingly, over half of all seniors currently in a LTC facility rely on Medicaid for help paying their bill.
Medicaid Eligibility Guidelines
To qualify for Medicaid benefits, you will need to meet Medicaid’s eligibility requirements for seniors, meaning you must meet the income and asset tests. The income limit is tied to the Federal Poverty Level and will change depending on which Medicaid category you apply under, your geographic location, and household size. The income limit is not where most seniors encounter a problem though. It is the extremely low asset limit that typically poses a problem for seniors who did not plan ahead. In most states, an individual applicant cannot own “countable resources” valued at over $2,000. Medicaid does exempt certain assets, such as your primary residence and a vehicle; however, many seniors have accumulated a retirement nest egg full of non-exempt assets that easily exceed the countable resources limit. If your assets exceed the limit, your application will be denied and you will have to “spend-down” your assets before applying again, meaning you will be expected to use those assets to cover your LTC expenses until the assets are gone. Furthermore, Medicaid’s five-year “look-back” rule prohibits you from transferring your non-exempt assets at the last minute in anticipation of the need to qualify for Medicaid.
Last-Minute Medicaid Planning
The key to protecting your assets if you suddenly need to qualify for Medicaid is consulting with an experienced Medicaid planning attorney immediately. The tools and strategies implemented in your situation will depend on your unique circumstances; however, one goal will be to legally convert as many non-exempt assets as possible into exempt assets. For instance, because you’re the equity in your home is an exempt asset (up to a limit), you might be able to take your savings and pay off your mortgage, thereby converting the non-exempt savings funds into exempt equity.
Contact a Vero Beach Medicaid Planning Attorney
To learn more, please join us for an upcoming FREE seminar. If you have additional questions or concerns about last-minute Medicaid planning, please contact an experienced Vero Beach Medicaid planning attorney at Kulas & Crawford by calling (772) 398-0720 to schedule a consultation.
