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Medicaid (Nursing Home) Eligibility: Obstacles to Approval for Seniors

May 10, 2017 | Medicaid

MedicaidLike many seniors, you may not have considered the possibility that you would need Medicaid to pay for nursing home care at some point during your retirement years. Consequently, you did not plan for the possibility either. Unfortunately, you may find that having failed to include nursing home and Medicaid planning in your overall estate plan may result in some significant obstacles to approval if you now find that you need to qualify for Medicaid.

If you are concerned about your Medicaid eligibility for nursing home care, you should ultimately consult with an experienced Medicaid planning attorney. In the meantime, however, learning more about Medicaid eligibility for seniors is a good place to start.

Why Would I Need Medicaid Now When I’ve Never Needed It Before?

Unfortunately, this is precisely why so many seniors find themselves facing obstacles to eligibility during their retirement years and end up having to pay out-of-pocket for the nursing  home. If you made it through your entire working career without ever needing to depend on Medicaid benefits, you may never have considered the possibility that the need would arise during your retirement years.

The need does arise, however, for a significant percentage of seniors. Why? The answer lies in the likelihood that you will need long-term care or nursing home care. When you enter your retirement years (age 65), you stand about a 50 percent chance of needing long-term care at some point in the future. The longer you live, the more those odds will increase. At age 85, for example, your odds of needing long-term care will have increased to a 75 percent chance.

The need to qualify for Medicaid comes in when you consider the cost of long-term care. In the State of Georgia, the average yearly nursing home bill for a private room was about $75,000 for 2016.

What many people fail to realize is that neither private health insurance nor Medicare will cover long-term care or nursing home expenses. Private health insurance plans almost always exclude long-term care expenses unless you paid for a separate long-term care, assisted living or nursing home insurance policy.

Medicare only covers long-term care expenses in very narrow circumstances, and even then, they will only cover nursing home costs for a very short period of time. For this reason, over half of all seniors in a nursing home turn to Medicaid for help.

Obstacles to Medicaid (Nursing Home) Eligibility

For the average senior, the biggest obstacle to Medicaid eligibility, assuming the applicant did not plan ahead, is the “countable resources” limit imposed by the program. An applicant cannot have non-exempt countable resources (assets) valued at over $2,000 to be approved for Medicaid.

Even though assets such as a home are exempt, many seniors have a nest egg with assets that are worth far more than $2,000. If your assets exceed the limit, Medicaid will impose a waiting period, during which time you will be expected to “spend-down” your assets.

In practical terms, this means you need to sell your assets and rely on the proceeds to pay your nursing home expenses during the waiting period. It also means your nest egg could be depleted within a short period of time.

Transferring assets in anticipating of applying for Medicaid won’t work either because Medicaid also uses a five-year look-back period that allows the program to review your assets for the five-year period leading up to your application. Any asset transfers for less than fair market value will be disallowed and the value of the asset imputed back into your estate for the purpose of determining your eligibility.

The way to avoid these obstacles is to work closely with your Georgia estate planning attorney throughout the course of your lifetime to ensure that Medicaid planning is part of your comprehensive estate plan. Legal strategies and tools can be incorporated into your estate plan to ensure that your assets are protected and that you qualify for Medicaid when the time comes that you need benefits to help cover your long-term care and  nursing home expenses.

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If you have additional questions or concerns regarding how to incorporate Medicaid planning strategies and tools into your estate plan, contact the experienced Georgia estate planning attorneys at Fouts Law Group, LLC by calling (678) 242-8344 to schedule an appointment.

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