Long term care costs are a threat to the preservation of personal assets and one’s legacy. Navigating through the complexity of finding the best long term care solution for a loved one you are caring for now, or have cared for in the past, can be overwhelming.
Furthermore, it can be emotionally challenging to accept that your beloved arrived at this particular stage of life’s journey. Even though this may be the case, on a positive note, you can choose to see it as an opportunity to get informed and to plan ahead for your own possible, future long term care needs. With commitment, patience, and discipline to acquire the facts, each individual can make the best decision for his/her own particular circumstance as well as that of a loved one.
This post is intended to provide limited information to encourage you to further investigate the subject of long term health care before a need for residency at an assisted living facility or nursing home arises. Getting informed will help you ask the right questions before you take action. It’s a good idea to pick the best professional you can find to help you select the best alternatives. A Board Certified Elder Law Attorney, highly specialized and with extensive experience in your State’s Medicaid Laws, may prove to be a wise choice.
You may be surprised to learn that even if initially you are not eligible for Medicaid benefits, you may become eligible with some advance planning and a window of at least five years before the need arises for long term care. Before going on, a bit of clarification is in order. Medicaid is not the same program as Medicare.
First, a few words on Medicare:
- It is a federal program
- It provides health coverage for covered services and hospital care, certain medical equipment, and prescription drugs under Part D of the program
- Eligibility is for people who meet the age requirement of 65 years of age and older
- Eligibility is also for people who are under the age of 65 who have a disability
- It is not based on a person’s income and assets
- It may not provide as much coverage and benefits as you may need; for example, it does not cover long term care or ongoing nursing home residency
Medicaid, on the other hand, is different from Medicare in that:
- It is both a State and Federal program
- It provides health coverage for low-income and low-asset people
- Persons eligible could include children, pregnant women, the disabled, the elderly needing nursing home care, and others
The focus of this post, however, is on the subject of the Elderly population. Many Seniors may lack the financial means to cover the costs that come with advancing in age and deterioration of health. If the need for nursing home residency arises, “Medicare” will not cover the cost on a long term, ongoing basis. Although “Medicaid” could cover nursing home expenses, some Seniors may not be low-income and low-asset enough to fall within the Medicaid eligibility requirements.
After working so hard to acquire a few modest assets during the working years, Seniors might find themselves losing it all on health care in the later years. Nursing home care can be very, very costly. So what can this “not rich enough/not poor enough” group of individuals do if they need more continuous care in a nursing home environment? What can be done to preserve personal assets and at the same time pay for long tern care? Well, one potential option is described below.
With some advance planning an individual can become eligible for “Medicaid” and at the same time preserve his/her legacy. First, it is important to select and hire the best professional for guidance in qualifying for Medicaid. Making sure the selected expert specializes in Elder law and in the corresponding State’s Medicaid rules is paramount to achieving a well drafted and provisioned plan of action.
Second, discuss with the expert the subject of an irrevocable trust. This trust is sometimes called “Medicaid Asset Protection Trust” or “Five-year Trust”. Basically, a person transfers his/her assets to the trust. This has the effect of moving the individual closer towards qualifying for Medicaid after five years from the transfer of the assets into the trust. Medicaid has a five-year “look back period”. In this scenario, the trust, and not the individual, owns the assets. A well-experienced professional will know what provisions to include, and as important, what provisions not to include in the trust. The ultimate goal is to be best served with regards to tax considerations, Medicaid eligibility, and asset protection.
Other terms to research and discuss with the appropriate experts include the following:
- Qualified Income Trusts
- Medicaid Estate Recovery Program (MERP)
- Expanded Estate Recovery
- Non-Long Term Care Related (LTCR) Medicaid Estate Recovery
- Special Purpose Trusts
Separate Topics that may be of interest to look into for Aging in Place:
- Long Term Care Insurance
- Supplemental Insurance Policy
Hopefully this post has served its purpose of empowering you with the desire for more information for your own health care or that of someone close to you. The idea of asking questions and getting informed now allows for more selection as to where and how to live later. Just as important is to Ask Questions and Get Informed Before you Act in order to avoid unintentional bad choices. Each of us can, and should be, our own best health care advocates. It can be disappointing to assume that others will remember to disclose the details we should be aware of. Remember the saying “the devil’s in the details”.
Sending all the best intentions your way!
DISCLOSURE: Any information provided on and throughout this post including, but not limited to, information furnished from time to time on resource web links are provided for your convenience and general knowledge, is not warranted or guaranteed, and is not intended to be legal, health, medical, or professional advice. All information presented herein is subject to errors, omissions, and changes without notice. We urge you to seek the advice of qualified professionals for the most accurate information and before taking any action.
