The Medicaid program is very important to a significant percentage of senior citizens. This is because of the fact that Medicare will not pay for long-term care.
If you need assistance with your activities of daily living, you would be receiving custodial care. Medicare will pay for up to 100 days of convalescent care after surgery, but the program does not cover custodial care costs.
It is difficult to impossible for many people to pay long-term care expenses out-of-pocket. Our firm practices in the state of Connecticut. The median cost for a year in a nursing home in Connecticut is well in excess of $100,000.
Medicaid Planning and Five Year Look Back
Medicaid will pay for long-term care, but it is a need-based program. To obtain eligibility you must be able to demonstrate significant financial need. Everything that you own does not count, but the limit for countable assets is just $2000 for an individual in most states.
Medicaid planning involves something called a Medicaid spend down. You spend down or divest yourself of assets in advance of applying for Medicaid so that you can fit within the income and asset limits.
This can be done, but you cannot find out that you need nursing home care today, give your assets to your children tomorrow, and qualify for Medicaid the next day.
There is a five year Medicaid look back period. The Medicaid evaluators will examine your financial profile going back five years from the date of your application. If they find that you have given away assets within this five year interim, your application will be denied.
A penalty is imposed. The duration of the penalty is based on the amount of the divestitures as they compare to the average cost of nursing home care in Connecticut. For example, if you gave away an amount that would have paid for one year of nursing home care, your eligibility for Medicaid will be delayed by one year.
When you are planning ahead with future Medicaid eligibility in mind, you must act early on because of the existence of the five year look back.
Medicaid Planning Special Report
In this post we have provided some basic facts about the Medicaid program as it applies to seniors who require long-term care. If you would like to obtain some in-depth information about Medicaid planning, we have a valuable resource that is available to you.
We have prepared a free special report on the topic of Medicaid planning. To obtain access to your copy of the report, click this link and follow the simple instructions: Free Medicaid Planning Report.
Free Medicaid Planning Consultation
If you would like to discuss Medicaid planning with a licensed elder law attorney, contact us to request a free consultation.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
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