As many seniors quickly learn when they move into their retirement years, elder law concerns can sometimes be dramatically different than the legal issues they faced in their younger years. Nowhere is this truth more self-evident than in matter concerning long-term health care. A large percentage of American seniors will eventually spend at least some time in a nursing home, with many taking up permanent residence in the facilities. The nuances of long-term care, coupled with the high costs associated with residency, can leave seniors with many questions. A Michigan Medicaid attorney can help to provide the elder law answers these seniors need.
Coping with Costs
For most, the central question on their minds focuses on one area of concern: how to pay for the ever-rising costs associated with long-term care. With nursing home care averaging in excess of $200 a day across much of the country, many seniors are surprised to discover that they have no real means for covering those costs. That leaves them turning to government assistance – most notably, the joint federal and state program known as Medicaid. In recent years, Medicaid has evolved from a program that principally provided benefits to the poorest Americans to one that has also become the single largest payment source for nursing homes in the country.
Why Not Medicare?
Some seniors make the mistake of assuming that Medicare will take care of long-term care. As a general rule, it will not. Despite the fact that you pay into the Medicare program throughout your working life, that program will be of little help in the event that you find yourself in need of serious long-term health care assistance. In fact, even when Medicare does provide some semblance of long-term care, that care is limited to one hundred days of coverage. Once that is exhausted, most people end up turning to either self-pay options, long-term care insurance, or Medicaid. Few can afford nursing home care on their own, and long-term care insurance is not something most seniors carry. That leaves Medicaid as the primary payment source for care.
Savings vs Benefits
However, the Medicaid program itself can be a source of confusion for seniors. The program is needs-based, with strict limitations on the total value of assets and income that applicants are allowed to have. For seniors who have tried to save and invest so that they could leave something behind for their loved ones, those asset and income limitations can present a real challenge. Many end up spending all of their savings on long-term care before they impoverish themselves to the point where Medicaid will approve their applications for benefits.
That, of course, can effectively end any attempt to leave loved ones with even a minor inheritance. It also renders those seniors completely dependent upon government benefits for their care. If great care is not taken to prevent more widespread financial damage, it could also leave spouses and other family members in a precarious state. Obviously, some type of planning is required if those negative outcomes are to be avoided. That’s where Medicaid planning comes in. With the right strategic effort, you can preserve some portion of your assets while still qualifying for the program benefits you need to ensure that your long-term care needs are met.
How Medicaid Planning Works
Medicaid planning involves the use of various planning tools and strategies to reorganize your assets in a way that enables you to meet Medicaid eligibility requirements without impoverishing yourself. It uses certain legal techniques to shelter assets and protect them from nursing home costs – while maintaining them for your loved ones’ benefit. Sound Medicaid planning can help to protect assets in ways that most people never would have imagined.
For example, you may have heard that you must give away everything to qualify for Medicaid. That is simply not the case. The key to avoiding that scenario is to know which of your assets are considered as countable, and which are non-countable for Medicaid eligibility purposes. Once you understand the difference, then all you need to do is convert those countable assets into assets that Medicaid won’t count toward eligibility.
- Countable Assets: Bank accounts, IRAs, certificates of deposits, stocks, and investment properties are all countable assets. If you have more than one vehicle, only one is considered non-countable. In other words, pretty much anything that you own in your own name may be considered as a countable asset for Medicaid eligibility consideration.
- Non-Countable Assets: Your home is not counted; however if you are not married, its value cannot exceed $552,000 (2016). You are also allowed one vehicle, your household belongings, and funeral-related assets like a funeral service contract and prepaid burial plot.
The important thing to recognize here is that you can turn many of your countable assets into non-countable assets if you know which strategies to use. These strategies can consist of gifting, the use of certain types of trusts, and other Medicaid planning options. However, these are not things that you want to try on your own, since even a small error could result in eligibility penalties that could see you being denied the benefits you need for your important long-term care.
To get the most out of any Medicaid planning strategy, you need to rely on the expertise of a professional attorney who has experience helping others just like you. For best results and the widest possible array of options, you should begin that planning well in advance of your Medicaid need. Still, even if you are already in a nursing home, it is never too late to begin to take advantage of strategies that can protect your assets from the high cost of nursing home care.
At Biddinger, Bitzer & Estelle, PLLC, our estate planning and elder law attorneys can help you to make the most of your Medicaid planning efforts. To find out more about how we can assist you in protecting your assets while securing the program benefit eligibility you need, contact us at our website or call (989) 872-5601 today.