Hyden, Miron & Foster, PLLC Law Blog

Wednesday, May 20, 2015

Medicaid Planning: 5 Tips to Consider in Planning for Long-Term Care Costs

One of the most misunderstood aspects of long-term care is whether coverage is offered by Medicare, and for how much. Below you’ll find several tips with regard to planning for long-term care, including qualifying for need-based coverage through the government’s Medicaid program. 

Tip #5: Medicare Will Not Cover Long-Term Care Costs: This is an important starting point for many seniors, and may come as a surprise. Medicare coverage for around-the-clock skilled nursing is generally only available for a maximum of 100 days, and is designed to effectuate proper healing post-surgery or after a debilitating fall. If coverage is needed beyond this time period, enrollees must either pay out-of-pocket, or consider other options. 

Tip #4: Medicaid Eligibility Planning Should Begin Today: As you consider your possible long-term care needs, the best time to start planning is today. An experienced elder law attorney can walk you through the financial steps necessary, whether you need care immediately or in 20 years. No matter your situation, don’t delay – the longer you wait to plan, the more you could lose in the long run. 

Tip #3: Qualifying for Medicaid Requires Financial Need: In general, an applicant qualifies for Medicaid once he or she has $2,000 or less in countable assets (not including the applicant’s home or vehicle).  There are also every strict income limitations. The maximum amount of income varies for each state.

Tip #2: An Irrevocable Trust May Help: An irrevocable trust may help protect assets from the costs of long-term care. Reason being, once an asset is irrevocably retitled into the name of a trust, the previous owner no longer has access to the asset, thereby reducing his total countable assets. 

Tip #1: Advance Planning is Necessary to Avoid the Look-Back Period: Whether you plan to transfer an asset outright to a family member, or into an irrevocable trust, the transfer must have occurred more than five years from the date of application for long-term care coverage through Medicaid. If the time span is any shorter, Medicaid will impose a penalty.

For more information about proper Medicaid planning, contact the elder law attorneys of Hyden, Miron & Foster, PLLC, by calling (501)482-1787 or (888)770-1848. 

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