The eight biggest mistakes people make in attempting to qualify for Medicaid for long-term skilled nursing care are:
- Thinking it’s too late. It is almost never too late to take planning steps, even after a senior has moved to a nursing home.
- Giving away assets too early. First, it’s your money, your house, or both. Make sure to take care of yourself first. Don’t put your security at risk by putting it in the hands of your children. Sudden transfers done without careful planning can cause significant tax and Medicaid issues as well.
- Ignoring important “safe harbors” created by Congress. Certain transfers are permitted by the law without jeopardizing Medicaid eligibility. These include: transfers to: one’s spouse; disabled children; caretaker children; a “pay-back” trust if under 65; a pooled disability trust at any age.
- Failing to take advantage of protections for the spouse of a nursing home resident. These protections include petitioning for an increased community spouse resource allowance, in some instances petitioning for an increased income allowance, and/or establishing an estate plan which includes provisions to protect both spouses in the event a spouse predeceases the nursing home resident, or in the event the other spouse also needs long-term care.
- Applying for Medicaid too early. This can result in a delay in getting benefits, and in some instances a longer ineligibility period.
- Applying for Medicaid too late. This can mean the loss of many months of eligibility, and of the assets which were spent to pay out-of-pocket for those months of care (in York County, nursing home care costs between $10,000 and $12,000 a month).
- Confusion about Medicaid Estate Recovery. Estate recovery is the process by which the State recovers certain Medicaid benefits paid on behalf of a Medicaid enrollee after he or she passes away. In Pennsylvania, Medicaid can only recover from the decedent’s probate estate (not from anything passing by beneficiary designation, such as IRAs, life insurance, jointly owned property, and such). This even can include property which is exempt as long as the surviving spouse is alive.
- Not getting expert help. This is a complicated field that most people only have to navigate once in their lives. Tens of thousands of dollars are at stake (remember, nursing home care costs between $10,000 and $12,000 a month). But don’t worry – we’ve got your back. A qualified elder law attorney can help you through this maze of rules and regulations and maximize the protection of your assets, in some cases to the point of preserving nearly all of them for you and your family. It’s penny wise and dollar foolish not to consult with people who specialize in guiding clients through the process – qualified elder law attorneys well-versed in the Medicaid rules.
If you have questions about Medicaid planning consider joining us for one of our upcoming workshops. Just click here to RSVP.
