Sometimes people say “it is never too late.” This may be true about some things, but there is such a thing as closing the stable door after the horse has bolted. You need to keep this in mind when it comes to Medicaid planning in Oklahoma, Kansas or Missouri.
If you have worked hard all your life you may wonder why you should even consider the subject of Medicaid. The simple answer is that you have paid into the program during your working career, you are eligible for Medicare, and you may be eligible to seek Medicaid coverage for those with limited financial resources.
While Medicare is an excellent health care program, there is a gap in the Medicare program. Over half of us are going to need living assistance at some point, and Medicare won’t pay for extended stays in a nursing home or assisted living community.
Because nursing homes and assisted living communities are very expensive, most people can’t afford to pay for them out-of-pocket. This is even true for people who retired with $200,000 or more in reserve.
Since Medicaid can help pay for long-term care, it has become relevant to those responsible people who are planning ahead for their later years. If you properly divest yourself of assets well in advance of applying for Medicaid, you can stay within the low upper asset limit of $2,000. This requires you to transfer resources to loved ones before you apply for Medicaid benefits.
When Is It Too Late?
While “spending down” is a common practice, it isn’t necessarily the best. You must act well in advance to take advantage of more beneficial Medicaid planning strategies. If you gift assets within five years of applying for Medicaid, you may not be eligible for quite some time.
Medicaid caseworkers look back five years from the date of your application and if there were divestitures during this period, a penalty will be imposed.
The amount of the penalty is determined by a formula that is normally adjusted each year. It is based on the amount of money you gave away during this five-year period and the average cost of care in your state.
While it might be said you have waited too long if you are being penalized, Medicaid planning can still be relevant. It might not be optimal, but you can do damage control with the assistance of a licensed elder law attorney in Oklahoma, Kansas or Missouri. If you don’t seek professional advice you may overlook an opportunity that could help you gain benefits even if you acted at the wrong time.