Is It Too Late for Medicaid Planning to Help Me?
If you have never needed to rely on Medicaid to cover your health care expenses, you might not see the need to include Medicaid planning in your estate plan. Unfortunately, the reality is that many seniors do eventually need to qualify for Medicaid at some point to help with the high cost of long-term care. If you find yourself in that position, is it too late for Medicaid planning to help? To help answer that question, a Loveland Medicaid planning attorney at Zimmer Law Office explains how last-minute Medicaid planning may be able to help you.
Why You Might Need to Qualify for Medicaid
Nationwide, the average yearly cost of long-term care was over $100,000 for 2021. In Ohio, you can expect to pay around the national average. Considering an average stay of around three years, you could easily be facing an enormous LTC bill if you must pay out of pocket for care.
Like most seniors, you will probably rely on Medicare to cover most of your healthcare expenses. Unfortunately, however, Medicare only covers LTC expenses under very limited circumstances, and even then, only for a very limited period. Furthermore, most basic health insurance plans also exclude LTC expenses. Therefore, unless you purchased a standalone long-term care insurance policy prior to the need for coverage, you will be faced with the prospect of covering your LTC expenses out of pocket. For the average person, an entire retirement nest egg could be lost to LTC costs if forced to pay for them out of pocket. This is where the need to qualify for Medicaid comes in because Medicaid will cover LTC costs for those who qualify.
Qualifying for Medicaid
Although Medicaid is a federal program, it is administered by the individual states. For this reason, you will find some variation among the states regarding eligibility guidelines and benefits offered to participants. In every state, however, Medicaid is what is referred to as a “needs based” program, meaning that an applicant must demonstrate a financial need to be approved for benefits.
Because Medicaid is intended to provide healthcare benefits to low-income individuals and families, eligibility for Medicaid is determined, in part, by an applicant’s income and “countable resources” which refers to the value of an applicant’s non-exempt assets. The countable resources limit is only $2,000 for an individual in most states, including Ohio.
If your countable resources exceed the limit, Medicaid will deny your application until such time as your countable resources fall below the acceptable limit. Simply giving assets away, however, is not a solution because Medicaid also uses a five-year “look-back” period that allows Medicaid to review your finances for the five-year period prior to application. Asset transfers made for less than fair market value during that time-frame could lead to Medicaid imposing a waiting period during which you are not eligible for benefits.
Last-Minute Medicaid Planning
If you suddenly need to qualify for Medicaid and failed to plan for that need, the good news is that there are some perfectly legal last-minute Medicaid planning strategies that may still be able to help you. For example, you might be able to convert a non-exempt asset into an exempt asset by using cash to pay down the mortgage on your primary residence. If you need to qualify for Medicaid, do not just assume that you won’t. Instead, consult with an experienced Medicaid planning attorney to find out what last-minute Medicaid planning tools and strategies might be able to help.
Contact a Loveland Medicaid Planning Attorney
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about incorporating Medicaid planning into your estate plan or whether last-minute Medicaid planning can help you, contact an experienced Loveland Medicaid planning attorney at Zimmer Law Office by calling 513-721-1513 to schedule your appointment today.