Long-term care services, whether it’s at home, in an assisted living center, or a nursing home, can amount to a monthly expense reaching into the thousands, presenting a financial challenge for numerous households. Often, the only solution for many is to sell their homes and liquidate their assets to cover these costs. However, given the choice and availability of resources, the majority would rather maintain their homes and assets, which they have dedicated a lifetime to acquiring, to bequeath to their family.
In many instances, Medicaid planning serves as a viable solution. As a specialized area within elder law, Medicaid planning enables families to safeguard a substantial portion of their assets while securing Medicaid benefits to cover the long-term care needs of their family member.
If you or a loved one need long-term care services, or are looking to prepare for such a possibility down the line, it’s wise to seek guidance from an elder law attorney at Parks Zeigler, PLLC. A Medicaid planning attorney in Virginia Beach can outline available options and assist in devising a plan that safeguards your assets while securing access to long-term care.
What is Long-Term Care?
Long-term care encompasses a variety of services and supports to meet health or personal care needs over an extended period. It is designed for individuals who are unable to perform basic daily activities such as dressing, bathing, or eating on their own due to chronic illness, disability, or the aging process. Long-term care can be provided in different settings, including one’s home, a community facility, or a residential care establishment like a nursing home. While it often includes medical care, the focus is on providing the necessary support for day-to-day living.
The necessity for long-term care can arise suddenly, such as after a heart attack or stroke, or it can develop gradually, as one’s abilities diminish over time. It stands as a critical issue facing an aging population, highlighting the importance of planning for future care needs and considering the financial implications associated with long-term care services. A Medicaid planning lawyer in Virginia Beach can help a family understand their options for long-term care.
Why a Person Might Need to Qualify for Medicaid
Medicare, like other traditional acute care policies, offers limited coverage for long-term care. It does not cover custodial care, which is care that helps individuals with activities of daily living like bathing, dressing, and eating. Medicare’s coverage is primarily focused on short-term services for conditions expected to improve, such as skilled nursing care, physical therapy, or hospice care after a hospital stay. When it comes to long-term care, Medicare may cover a skilled nursing facility for a certain period under specific conditions following a hospitalization, but it does not cover long stays in nursing homes or ongoing personal home care. This limited coverage underscores the importance of additional planning for long-term care needs.
Medicaid is a health insurance program financed and managed by the federal government, designed for individuals with restricted financial means. While it is a nationwide program, each state oversees its own Medicaid operations and establishes specific eligibility criteria, with a fundamental requirement being the financial necessity of the applicant.
The notion of qualifying for Medicaid may seem surprising to many, but the the high expenses associated with in-home care and skilled nursing facilities render Medicaid a critical resource for those in need of such services. For individuals who do not have significant savings they are willing to deplete for care, Medicaid becomes an essential resource to access quality long-term care.
People with savings, a home, and an income can qualify for Medicaid under certain circumstances. The Medicaid program exempts certain assets from consideration when determining eligibility. By strategically holding exempt assets, a person could be eligible for Medicaid. A Virginia Beach lawyer can review a person’s financial situation and devise a plan to make them Medicaid-eligible.
What is Medicaid Planning?
Medicaid planning is a strategic approach to arranging finances and assets in order to qualify for Medicaid, a program that provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. It involves understanding the complex rules for asset and income limits that can affect an individual’s eligibility for Medicaid.
The first step in Medicaid planning usually involves a comprehensive assessment of an individual’s financial situation. This includes taking stock of all assets, income, debts, and other financial obligations. The goal is to create a clear picture of what resources are available and how they might affect Medicaid eligibility. Since Medicaid is designed for those with limited income and assets, individuals often need to restructure their finances to meet the program’s eligibility requirements.
Restructuring finances can include strategies (often referred to as a spend down) such as paying off debt, making allowable purchases, converting assets into an income stream, transferring real estate to a spouse or caregiver child and other deliberate gifting strategies, transfer of assets into specific types of trusts, and other options. Financial maneuvers must be done carefully to avoid penalties or periods of ineligibility. This aspect of Medicaid planning often requires the expertise of a knowledgeable Virginia Beach attorney.
Another aspect of Medicaid planning is the look-back period. Medicaid’s look-back period is a timeframe during which all asset transfers are scrutinized. Any assets transferred for less than fair market value during this period may result in a penalty, which can delay the individual’s eligibility for Medicaid benefits. Planning ahead is crucial because the look-back period can extend back several years from the date of application for Medicaid.
Medicaid Planning Benefits
Medicaid planning can help protect an individual’s or couple’s assets from being completely depleted due to the high costs of long-term care. By restructuring assets individuals can preserve their wealth for their spouses, children, or other heirs while still qualifying for Medicaid.
Medicaid planning can provide financial security for the healthy spouse when the other requires long-term care. There are special rules within Medicaid, such as the Community Spouse Resource Allowance (CSRA), that protect the healthy spouse from impoverishment, allowing them to keep a portion of the couple’s assets and income to maintain their standard of living while their partner receives care.
Another benefit of using Medicaid to pay for long-term nursing care, is that the protected assets can improve quality of life. Since Medicaid does not pay for everything a person might need while in a facility, the protected assets are available to cover additional things for the individual. For example, the protected assets may be used to pay for a better hearing aid, laptop, streaming service subscription, haircuts, or other small luxuries the nursing home patient might enjoy. A lawyer in Virginia Beach can discuss all of the long-term care costs Medicaid planning can prepare for.
Secure Eligibility for Long-Term Care with a Virginia Beach Medicaid Planning Attorney
The vast majority of us will need long-term care at some point in our life. The Medicaid program allows individuals to qualify for long-term care benefits, provided they arrange their finances according to certain guidelines. Effective Medicaid planning requires a thorough grasp of the relevant laws to identify methods for safeguarding assets and reducing tax liabilities, all while maintaining access to necessary long-term care services.
The timing of Medicaid planning is critical and can significantly impact the effectiveness of the strategies employed. Ideally, Medicaid planning should begin well before long-term care is needed. This proactive approach allows for the implementation of asset protection strategies while navigating the look-back period, which is the time frame during which Medicaid scrutinizes asset transfers before one applies for benefits. Planning early helps ensure that individuals do not incur penalties that could delay their eligibility for Medicaid when they need it. It also affords more options for legal and financial maneuvers, such as setting up trusts, converting countable assets into exempt assets, and making permitted transfers.
However, even if the need for long-term care is immediate or unforeseen, there are still Medicaid planning techniques that can be applied in crisis situations. In these cases, the focus shifts to rapidly adjusting assets to meet eligibility criteria and working within the constraints of the current financial landscape. While last-minute planning options may be more limited and complex, with the guidance of a skilled attorney, it is often possible to develop a plan that can protect a portion of an individual’s assets and secure Medicaid coverage for long-term care needs. The key is to engage a Virginia Beach Medicaid planning lawyer as early as possible to maximize the benefits and options available.
