Like many people, you may make it all the way to your retirement years without ever giving the need to qualify for Medicaid benefits a second thought. Whether you have been fortunate enough to enjoy employer sponsored health insurance, or paid for a private health insurance policy out of your own pocket, you have likely always thought of Medicaid as something you would never need. As such, you probably know very little about the program. Why would you need to know after all, right? As it turns out, however, you may need to turn to Medicaid during your “Golden Years” to help defray the high costs associated with long-term care. As with other government assistance programs, the Medicaid rules can be confusing and applying for benefits can be a nightmare. The sheer complexity of the Medicaid application process is enough to cause a significant number of applications to be denied. A Medicaid attorney can help you plan ahead by including Medicaid planning in your overall estate plan, dramatically increasing your odds of being approved for benefits and dramatically decreasing the odds that you will lose assets in the process.
What Is Medicaid?
Medicaid is a healthcare program for low income individuals and families as well as the elderly and disabled. The program is primarily funded by the federal government; however, it is administered by the individual states. For this reason, the eligibility requirements as well as the type and value of the benefits available will vary somewhat from one state to the next.
Why Would I Need Medicaid?
During your working years you may not have needed Medicaid benefits, and likely would not have qualified for them anyway. That all changes, however, when you reach retirement age. One of the primary causes of the change is the increased likelihood that you will need long-term care. Prior to age 65 you stand about a 20 percent chance of suffering a period of incapacity that requires a stay in a long-term care facility. By age 65, those odds jump to 50 percent and if you are still around at age 85 they jump to 75 percent. If you (or your spouse) do end up in need of a long-term care facility, the cost of that care may shock you.
Nationwide, the average cost of a year in a long-term care facility is about $80,000. Unfortunately, in the State of New Hampshire a year in long-term care will run you considerably more than the national average at about $120,000 per year on average. Don’t count on private or employer sponsored health insurance plans to cover the cost as most do not cover long-term care expenses unless you purchased a separate long-term are rider at a significant additional cost. Medicare is not an option either as Medicare only covers up to 100 days in a long-term care facility and even then only under very specific circumstances. Unless you can afford to cover the cost out of pocket, Medicaid may be the only option because Medicaid does cover long-term care expenses.
Why Is Planning Necessary?
To qualify for Medicaid benefits you must have both income and “countable resources” valued below the program limits. As a retiree your income may not be an issue; however, you have likely amassed some valuable assets that could easily put your “countable resources” over the program limit which is often as low as $2,000. Because Medicaid employs a five year “look-back” rule, simply transferring those assets when you realize the need for benefits won’t work. The “look-back” rule allows Medicaid to check for assets transfers within the five year period prior to your application and effectively discount the transfer, adding the value back into your estate. If your assets exceed the program limit you may be required to rely on them to cover your costs until they have all been used up, at which point Medicaid will step in and start helping.
How Can a Medicaid Attorney Help Me?
No one wants to see their heard-earned assets diminished at the end of their life just because they need long-term care. The good news is that by working with a Medicaid attorney early on your life you can incorporate Medicaid planning into your comprehensive estate plan, thereby protecting your assets and ensuring that you will qualify for much needed benefits when the time comes down the road.
For additional information, please download our free report “Set the Stage for Medicaid Eligibility.” If you have additional questions or concerns regarding Medicaid planning, or would like to get started with your plan, contact the experienced New Hampshire estate planning attorneys at Debruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.