Medicaid planning is a method that lawyers use to help you pay for nursing home care with Medicaid while protecting your assets.
Who Needs Medicaid Planning?
If you cannot afford the cost of nursing home care, you probably need to talk to an elder law attorney about Medicaid planning. Nursing homes in Lexington, KY (where I practice law) average more than $70,000 per year.
Medicaid will foot the bill for long term care in a rest home. But first, you have to qualify for Medicaid. In order to do that, you have to have very few resources.
If you do not do any Medicaid planning, you may have to sell all your property to pay for nursing home care. Medicaid planning can help you hold on to your property, or pass it on to your family. Medicaid planning can also make sure that you have resources for yourself during a nursing home stay.
How Do I Qualify for Medicaid in KY?
The basic requirements to qualify for Medicaid are (roughly) the following:
- Your nursing home participates in Kentucky’s Medicaid program
- You require nursing home level of care
- You are over 65, disabled, or blind
- Your income is less than the cost of the nursing home
- You have less than $2,000 in “non-exempt” assets
Note that the technical requirements are somewhat more complex.
What if I have more than $2,000 in Assets?
Chances are, you have more than $2,000 in assets. This is where Medicaid planning becomes particularly important. Careful Medicaid planning can help you qualify for Mediciad even if you start out with more than $2,000 in assets.
Medicaid planning protects your assets
If you plan far enough in advance, you may be able to protect almost all your assets by giving them to your family or placing them in the right kind of trust. Do not do this unless you are under the guidance of an elder law attorney. Doing this by yourself may result in penalties.
Any gift made within five years of applying for Medicaid falls into the “look-back” period, and you can be penalized for making the gift.
If you did not do any Medicaid planning in advance, you may still be able to protect many of your assets. There are several options available, including paying for nursing home care until the “look-back” period passes, actually creating a penalty and using annuities to cover nursing home costs while the penalty runs, or the “gift-and-return” method that uses the return of gifted money to shrink the penalty period.
Medicaid planning is not something to do on your own. The advice in this article is very general, and you need to talk to an elder law attorney about your specific situation. Contact an elder law attorney who practices in Kentucky if you think that nursing home care might be in your or a family member’s future.
Thomas Cothran is an attorney who practice elder law in Lexington, KY.
Medicare’s Web Page for Nursing Homes
42 U.S.C. § 1395
42 C.F.R. § 409.61