Medicaid is more than just a government insurance program that provides services for people with limited incomes. Medicaid is also one of the primary payers of nursing home costs within the United States. Because Medicaid is often the only option for a senior who requires care in a nursing home, seniors need to understand Medicaid rules for coverage as well as other Medicaid guidelines that could affect their ability to get a nursing home paid for.
One of the most important things that seniors need to understand is the Medicaid five year lookback rule. This rule can make it harder for you to protect your personal assets and avoid spending your life savings just because you end up having to live in a nursing home.
There are options still for protecting your nest egg, but the sooner you act, the more of your assets you can keep safe. Nirenstein, Horowitz & Associates can explain why Medicaid coverage is so important and can help you to make a Medicaid plan, despite the Medicaid five year lookback rule. Give us a call today to learn more.
What is the Medicaid Five Year Lookback Rule?
Medicaid is supposed to be a means-tested benefits program. Its use is supposed to be restricted only to people who have very limited incomes and few financial resources. The problem is, Medicaid is also the only way for most seniors to pay for nursing homes. As a result, lots of people want to take advantage of Medicaid benefits, especially as they have paid taxes over their lives to support Medicaid and they believe it should be there for them when they need it.
Since Medicaid has resource limits and won’t provide coverage if you have too many assets, it is possible for people to simply give away their money and property so they no longer have assets. The problem is, Medicaid does not want this to happen. As a result, Medicaid has created a five-year lookback rule. The rule requires that an assessment be made of your financial behavior when you apply for Medicaid coverage. Medicaid looks at transactions you entered into and transfers of money or assets over the five years before you applied for Medicaid coverage. If you transferred assets by giving them away or charging a lot less than market value, Medicaid disqualifies you from getting benefits.
The period of benefits ineligibility that is triggered when you have transferred assets is based on the value of transferred assets divided by the average nursing home monthly cost in your area. This number is equal to the number of months of disqualification.
Why is Medicaid Planning Important?
Medicaid planning involves trying to make plans in advance so you can protect your assets and come below the Medicaid resource limit. Because of the five year lookback rule, the Medicaid planning process generally should be done more than five years before Medicaid coverage is needed. Talking to an attorney early about asset protection is going to be the key to making an effective Medicaid plan.
This is important because there is a substantial risk that you will end up in a nursing home at some time during your life, especially if you are already a senior. According to the Wall Street Journal, 70 percent of people 65 and up eventually have to spend time in a nursing home. Seniors over age 65 have approximately a 40 percent chance of needing nursing home care and a 20 percent chance of requiring this care in a residential setting for at least five years. If you don’t have a plan, your nest egg could be quickly depleted.
Getting Help from a Connecticut Medicaid Planning Lawyer
Because of the strong possibility that you could end up in a nursing home at some point, you should make plans as soon as you can to protect your assets and get covered. If you can work with a Connecticut Medicaid planning lawyer five or more years before the time that nursing home care is actually needed, the Medicaid five year lookback period won’t affect you. You can preserve and protect the maximum value of your assets so you can leave behind the largest inheritance possible as your legacy.
Nirenstein, Horowitz & Associates is here to help you get started on Medicaid planning today. Give us a call at 860-548-1000 or contact us online to learn more about the ways in which we can assist you in making an effective plan to protect assets and get Medicaid to pay for your nursing home bills.