Why is Medicaid Planning Important?
Estate planning concentrates on what will happen when a person passes away. Whereas, Elder Law outlines how to take care of someone during his or her life, including the management of assets, understanding Medicare, and planning for long-term care. W. David Keast is an Elder Law attorney who can help you determine how potential future nursing home costs and medical bills will be paid. The effects of aging are not the only reason you may need this counsel; an illness or accident could result in a need for nursing home care.
A bed in a nursing home will cost somewhere between $5,500 and $13,000 per month. While that is a broad range, even the lowest end of the spectrum is costly. Neither traditional health insurance nor Medicare will pay for an extended nursing home stay--which makes you ask, how am I going to afford the cost of long-term care? Often, the answer is Medicaid.
Medicaid is the primary payer of nursing home care- but this can be a problem because Medicaid is for people with low income or few resources. The Social Security Administration describes Medicaid as "a jointly funded, Federal-State health insurance program for low-income and needy people." As that states, individuals must come under set resource and income limits before qualifying for Medicaid. Those limits vary depending on whether you are single or married.
| Single | $2,000 for Ohio, $2000 for Kentucky |
| Married | One spouse can be on Medicaid while the other "Community Spouse" keeps 1/2 of their overall assets up to $119,220. |
While most people maintain resources that exceed the Medicaid limits, different planning, spend-down, and even gifting techniques can be applied to help obtain eligibility. Also, a properly planned trust can be executed so that the person receiving Medicaid can hold onto his/her funds to improve quality of life, and possibly pass on a legacy to children or loved ones.
Medicaid eligibility laws are incredibly complicated, requiring accurate and timely planning. Seemingly logical financial transactions in the "real world" can trigger severe monetary penalties in a Medicaid context, conceivably costing thousands of dollars. The sooner you create your Medicaid plan, the more assets you can protect. Medicaid looks back five years from the time you apply for coverage to determine if you have transferred assets, and a transfer of money or property can result in a period of disqualification.
If you have plans in place well in advance of needing nursing home care, you will not have many of these worries. These eligibility laws are the main reason why it is beneficial for young people to talk with elder law attorneys and make their plans well before they reach their golden years.