Even if you made it through your entire working years without ever turning to Medicaid for help covering your healthcare expenses, there is a very good chance you will need to do just that as a senior to cover the high cost of long-term care. If you do end up needing to qualify for Medicaid, both your income and your assets will be considered when determining eligibility. Knowing that, what assets can you have and still qualify for Medicaid as a senior in Oklahoma?
Why Might You Need to Qualify for Medicaid?
In the United States, we enjoy an average life expectancy that is almost twice what it was just a century ago. Though we are living longer, on average, we have yet to figure out a way to stop the natural aging process. Consequently, the longer you live the higher the likelihood that you will experience physical and/or mental deterioration that could eventually cause you to need long-term care (LTC). In fact, when you enter your retirement years, around age 65, you will already stand a 50 percent chance of needing some type of LTC services before the end of your life. Every year that passes those odds increase. At age 85, you will be facing a 75 percent chance of spending time in an LTC facility before the end of your life.
The cost of LTC is where the need to qualify for Medicaid comes in the picture. Nationwide, the average cost of a year in LTC was almost $90,000 for 2018. Fortunately, residents of the State of Oklahoma enjoy LTC costs that are below the national average. For that same year, the average cost of LTC in Oklahoma was $63,510. While LTC costs in Oklahoma are lower than the national average, an average three-year stay in an LTC facility still adds up to a significant amount of money if you are forced to pay for it out of pocket. Unfortunately, neither Medicare nor most health insurance policies will pay LTC expenses though, leaving many seniors with no other option but to turn to Medicaid for help.
How Do I Qualify for Medicaid?
The good news is that Medicaid will help cover long-term care expenses if you qualify for Medicaid. Because Medicaid is a needs-based program, an applicant must demonstrate financial need to be approved. To do that, you must have income and “countable resources” below the current threshold. The “countable resources” limit is very low in most states, including Oklahoma. An individual applicant cannot have countable resources worth more than $2,000. If you do have excess assets at the time you apply, your application will be denied and you will have to “spend-down” your assets before applying again. Fortunately, some assets are exempt, meaning they do not count toward your “countable resources,” including:
- Your home, up to an equity limit of $572,000 if you are planning to return or you have a spouse, a child under 21, or a disabled person residing in it.
- Your automobile with no equity limit.
- A burial fund for an applicant and spouse with a value of $1,500 or less, each. If the money is placed in an irrevocable burial trust then $7,500 is exempt.
- Household furnishings, furniture, clothing, jewelry, and other personal effects are not counted.
- Life insurance if face value is $1,500 or less. If it exceeds $1,500 in total face amount, then the cash value in these policies is countable.
Why Medicaid Planning Is Important
Because of Medicaid’s five-year look-back rule, you cannot simply transfer excess assets out of your name when you realize you need to qualify for Medicaid. The best way to ensure that you do qualify if the time comes that you need to is to incorporate Medicaid planning into your comprehensive estate plan now.
Contact Oklahoma Medicaid Planning Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding the ability to qualify for Medicaid in Oklahoma, contact the experienced Oklahoma Medicaid lawyers at Parman & Easterday by calling 405-843-6100 to schedule your appointment today.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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