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Medicaid Planning

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Here is another denial zone for most people entering their retirement years.  When you think about your retirement, it is natural that you would create a mental picture of a life of free time. You can travel, play golf or tennis, dine out, work in the garden, and otherwise enjoy your golden years in the way that you always envisioned when you were busy traversing a career path.

This is all well and as it should be, but at the same time it is important to consider the period of time that may follow your active retirement years.  The numbers do not lie.  A majority of senior citizens will need living assistance at some point in time, and a stay in a nursing home or an assisted living community is extremely expensive. Because of this, careful advanced planning is key.

Though Medicare does not pay for long-term care, Medicaid will pay for it if you can qualify. There is a $2000 upper resource limit which can lead you to thinking that there is no way that you will be able to qualify because of your financial holdings.

However, it should be noted that a lot of your most valuable possessions don’t count toward this figure, including your home and your vehicle. In addition, the healthy spouse of a senior citizen entering a long-term care facility can retain ownership of his or her half of the community assets up to a certain limit. In 2012, this limit is $113,640.

A lot of people will “spend down” in an effort to stay within the Medicaid limits. The tricky part is that there is a five year “look back” period and you can be penalized for divesting yourself of resources within five years of applying for Medicaid.

Given the intricacies of the qualification process expert guidance is crucial. If you would like to explore the possibility of angling toward Medicaid eligibility the wise course of action is to sit down and discuss the matter with a licensed and experienced Oklahoma City elder law attorney.

Larry Parman
Author, President and Founding Attorney
Parman & Easterday

Larry Parman, Attorney at Law
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Medicaid Planning

      • This is a very good question.  Quite often, the concept of “Medicaid planning” seems counterintuitive. Since Medicaid is a program for people with limited financial resources, you would never intentionally try to put yourself in a threatening financial situation.While this is true for the most part, there is a reason why many elders seek Medicaid eligibility late in their lives. The Medicaid program will pay for a stay in a nursing home, and there is a Medicaid Home and Community Based Services waiver that will pay for in-home care.Medicare does not cover the custodial care that nursing facilities provide, and it will not pay for in-home care that is provided by a home health aide.

      • Yes, and costs have been rising over recent years. According to the state, the average annual cost for nursing home care in Oklahoma is about $65,000.The United States Department of Health and Human Services tells us that the average length of stay for an elder in a nursing home is one year. This being stated, over half of people that receive paid care need it for more than a year, and 13 percent receive paid assistance for more than five years.If you are married, you and your spouse could potentially be forced to deal with two different sets of nursing home bills.

      • There is a $2,000 limit on assets you can hold or own in your name.  That said, there are some types of property that do not count. Wedding rings, engagement rings, and heirloom jewelry are not counted.  In addition, an applicant can maintain possession of one motor vehicle.Furniture and other household items and personal belongings are not counted, and you can have unlimited term life insurance and up to $1,500 of whole life insurance. The same amount can be saved for final expenses, and prepaid burial plots are not countable assets.

      • If you are a homeowner, the property does not count as long as its value does not exceed the equity limit. At the time of this writing, the equity limit exceeds $600,000, and the figure is updated annually to account for inflation. There is no equity limit if a healthy spouse is remaining in the home.The fact that you can qualify as a homeowner is positive on the one hand, but it is a situation that you want to avoid. In most states, Medicaid will seek reimbursement from the estates of deceased beneficiaries, so they could place a lien on your home if it is in your possession at the time of your death.

      • Aside from the exempt property, all of the property that is owned by each individual in the marriage would be counted. However, the healthy spouse is entitled to a Community Spouse Resource Allowance (“CSRA”).The CSRA is half of the countable assets up to a limit that is just over $130,000 at the present time. There is also a Community Spouse Resource Allowance that is in the $26,000 range.Income that belongs to the spouse that is in a nursing home must be contributed toward the long-term care costs that are being incurred.  However, there is an exception made when a healthy spouse is relying on the income.The at home healthy spouse can continue to receive a Monthly Maintenance Needs Allowance (“MMNA”) up to a maximum allowance of approximately $3,200. We are not giving exact figures because once again, these numbers are indexed for inflation each year.  In some states, if the Community (at home) Spouse’s income is below that amount, they can re-allocate a portion of the income of the nursing home spouse up to the MMNA limit.

      • You can make direct gifts or fund an irrevocable trust by gift to transfer assets out of your name with Medicaid eligibility in mind. However, you have to act in advance, because there is a five-year look back period.All divestitures must be completed at least five years before you submit your application for Medicaid coverage.  If the five years has not lapsed, there will be a requirement to spend down assets.

Schedule a Consultation Today!

We are here to help if you are ready to work with an Oklahoma City elder law attorney to develop a nursing home asset protection plan. You can send us a message to request a consultation appointment, and we can be reached by phone at 405-843-6100.

Larry Parman, Attorney at Law
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Medicaid Planning

At Parman & Easterday, our legal team believes you deserve to keep the money, property, and assets that you have worked all your life to acquire. These assets should serve as your legacy and you should be able to hand property down to your loved ones or use your money to support charities that you care about. Unfortunately, if you need to go into a nursing home and you do not have a Medicaid plan in place, that might not happen.

Nursing homes are extremely costly, and not covered by private insurers or even Medicare in most cases. Medicaid covers the cost of care, but only if you spend down your assets or if you make an advanced plan to protect them.

Our Medicaid planning lawyers in Oklahoma City, OK and City, KS, can help you to create your personalized plan. Give us a call today to find out more about your personalized solutions for protecting your assets and qualifying for Medicaid and to get answers to questions including:

  • What is involved in Medicaid planning?
  • When should I begin the Medicaid planning process?

What is Involved in Medicaid Planning?

Medicaid planning is a process of trying to get Medicaid to cover you sooner than the program otherwise would. Medicaid is a means-tested government benefits program, which has strict qualification criteria. It is also one of the only sources of nursing home payments available, as Medicare and most private insurers simply will not pay for routine custodial care in a nursing home.

Because Medicaid may be your only chance to get nursing home care covered, not being able to qualify for Medicaid benefits could destroy your legacy. You could be forced to spend your entire life savings and even sell property if you end up needing nursing home care as you get older.  

You would eventually be able to qualify as you spent down your resources and came below Medicaid’s permissible asset level that is required for you to qualify for benefits. The problem, of course, is then your savings would be gone and you would not have a legacy to leave to your loved ones.

The Medicaid planning process involves making sure your assets and property can be protected. You can structure ownership of this property in a smart way so that the assets and property you have in your possession are not actually counted as your possessions when assessing eligibility for means-tested Medicaid benefits. The assets will not be disqualifying if you do Medicaid planning correctly, and on paper you will not have resources, so Medicaid will begin to pay for nursing home care when you need it.  

You can do this process by using special types of trusts, and by making strategic transfers of assets. It is is imperative that you follow all legal guidelines for doing the process correctly to protect your assets, so you should strongly consider getting help from a legal professional.

When Should I Begin the Medicaid Planning Process?

Medicaid has a rule in place called the five year lookback rule. The purpose of the rule is to make sure that people do not transfer or give away property just to qualify for benefits. Medicaid will look back five years from when you require nursing home care, and will see if any assets were transferred. If so, you’ll be disqualified from Medicaid for a set number of months equal to dividing the value of transferred assets by the average monthly nursing home cost. During the disqualification period, you will likely have to pay out of pocket for nursing care.

To protect the maximum assets, this means you should try to create a Medicaid plan five years before you require nursing home care. If it is too late, you should act as quickly as possible to protect the maximum in assets.

How Can an Oklahoma City, OK Medicaid Planning Lawyer Help?

Parman & Easterday has a long track record of providing comprehensive Medicaid planning help to clients in and around Oklahoma City, OK. When you are concerned about the legacy you will leave behind and you want to make sure your assets will not be lost due to the bills for nursing home care, you need to take action.  

Give us a call today at (405) 843-6100 in Oklahoma City to begin the Medicaid planning process. You can also contact us online to speak with a member of our legal team and learn how to start protecting your assets so you’ll have the peace of mind of knowing a nursing home won’t drive you broke and leave nothing for you to give to the people you love.

Larry Parman, Attorney at Law
Latest posts by Larry Parman, Attorney at Law (see all)