Many people believe that because they are healthy, they will never need long-term care. So, why plan for Medicaid? Though you may be healthy now, no one can predict what the future holds. More than two-thirds of people age 65 or older need long-term care at some point. When clients ask, “do healthy people need Medicaid planning?” The answer is always yes.
Why would I need long-term care?
First, illness is not the only reason we need long-term care. Catastrophic injuries can also lead to the need for long-term attention. Long-term care often involves more than just medical treatment. Some individuals are placed in nursing homes for assistance with daily activities, such as dressing and bathing. In the event you find yourself in need of long term care of any kind, you must consider the possibility of seeking Medicaid assistance. Planning ahead can help increase your choices of how and where you receive support for the care you may need in the future.
Won’t my health insurance cover the costs?
The reality is, most people underestimate the costs of long-term care. In Arkansas, home health aide services in 2014 can run as much as $23.00 per hour. Assisted living facilities in Arkansas can cost as much as $40,000 a year and nursing homes as much as $60,000 a year. A misconception that many people have is that between private health insurance and Medicare, they have got it covered. The truth is, insurance and Medicare typically cover little, if any, of the costs of long-term care.
How does Medicaid planning help?
Medicaid is a government program that helps low-income individuals pay for medically necessary medical services. The resource limit for an individual is $2,000 and for a couple is $3,000. Although certain assets, such as your residence, are excluded when calculating your resources, it is easy for your savings to be depleted quickly before Medicaid starts paying for long-term care costs. The purpose of Medicaid planning is to prevent that from happening.
Unfortunately, you cannot simply transfer your assets into someone else’s name, in an attempt to qualify for Medicaid. Medicaid is considered a “payer of last resort,” which means Medicaid will not start paying for long-term care expenses until other payment sources have been used. As such, an applicant for Medicaid is not allowed to give away property or assets just before filing an application. If you do, any transfers of property that you made for he last five years will be scrutinized by your state’s Medicaid agency. These transfers may result in your benefits being delayed.
However, with careful planning you may be able to retain control of your hard earned assets and still qualify for Medicaid when the time comes. The earlier you start planning the better. If you have questions regarding Medicaid planning, or any other estate planning needs, please contact Wilcox Attorneys, PA online or by calling us at (479) 443-0062.
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