Medicaid Planning

Long term care is expensive.

Medicare and traditional health insurance do not cover nursing homes. And qualifying for Medicaid isn’t easy. We can help.

It's a fact of life: at some point, most of us will need long-term care. The cost of nursing homes and other forms of extended care can be prohibitive, though.

The average cost of a private room in a nursing home in America is now over $103,000 per year! Medicare and traditional health insurance do not cover nursing home costs. If you don’t have enough money saved up to cover those costs, you may have to apply for Medicaid.  But qualifying for Medicaid is a complex process, and there are many asset and resource limits that must be met in order to be eligible for coverage. 

However, there are strategies that can help protect yourself and your loved ones from the high cost of long-term care and to qualify for Medicaid if that becomes necessary.

There are potential penalties for failing to properly plan for Medicaid eligibility, so it is important to seek legal assistance if necessary. 

There are also other programs that can help pay for long-term care costs besides Medicaid, such as long-term care insurance. 

Some common misconceptions about Medicaid planning include that it is only for low-income individuals, or that, "the nursing home will take everything I own."   However, Medicaid planning is a complex process that should be undertaken with the help of an experienced attorney. 

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Medicaid can be an essential tool to help you pay for the high cost of long-term care. We can help you navigate the complex world of Medicaid eligibility and create a plan that's tailored to your unique needs.

Don't wait until it's too late. Contact our office today to schedule a consultation. We'll be happy to answer all of your questions and help you get started on the path to peace of mind.

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Nursing Home Costs in the Tri-State Area

A nursing home bed in Greater Cincinnati and Northern Kentucky will cost somewhere between $7,000 and $16,000 per month.

While that is a wide range, even the lowest end of the spectrum is extremely expensive. Neither traditional health insurance nor Medicare will pay for an extended nursing home stay--which begs the question: How is one to afford the cost of long term care?  Often, the answer is Medicaid.

Rigid Resource Limits

The Social Security Administration describes Medicaid as, "a jointly funded, Federal-State health insurance program for low-income and needy people."

As that description suggests, individuals must fall under rigid resource and income limits before qualifying for Medicaid.  Those limits vary depending on whether you are single or married.

Single Married
$2,000* One spouse can be on Medicaid while the other "Community Spouse" keeps 1/2 of their overall assets up to $130,380* plus a house, plus a car

* Ohio and Kentucky also allow single individuals and married couples to keep assets in their IRAs and 401ks under certain conditions

While most people in Southwest Ohio  and Northern Kentucky possess resources that exceed the Medicaid limits, various planning, spend-down, and even gifting techniques can be employed to help an individual obtain eligibility.

In addition, a properly drafted trust can be established so that the person receiving Medicaid can hold onto his/her own funds to improve quality of life, and potentially pass on a legacy to children or loved ones.

Extremely Complicated Laws

Medicaid eligibility laws are extremely complicated requiring careful and timely planning.

Seemingly logical financial transactions in the "real world" can trigger harsh monetary penalties in a Medicaid context, potentially costing tens of thousands of dollars.

It should be noted as well that Medicaid can also be obtained to help individuals stay in one's own home through the Passport Program.  Plus, a number of Assisted Living facilities in Greater Cincinnati accept Medicaid through the Assisted Living Waiver Program.  Space in these facilities, however, is often limited.

You should consult an elder law attorney if it is possible that you or a loved one will require Medicaid to pay for long term care.

Frequently Asked Questions

What is Medicaid?

Medicaid is a joint federal and state health insurance program for low-income and needy people. There are various branches of Medicaid such as MAGI Medicaid for working individuals who cannot afford health insurance.  There is  Medicaid for the Aged, Blind and Disabled which is most often used to pay for long-term care.  In order to qualify for Medicaid that pays for long-term care, individuals must fall under rigid resource and income limits. These limits vary depending on whether the applicant is single or married.

What are the income and resource limits for Medicaid?

In order to qualify for Medicaid, applicants must meet income and asset thresholds. 

For long term care facilities, Medicaid uses a "Special Income Level" of $2,523 per month. 

Additionally, single applicants can own resources totaling $2000 or less.

Couples can own assets up to a cap of $130,380 plus a house and a car.

Ohio and Kentucky also allow Medicaid applicants and their spouses to keep their IRA and 401k assets under certain conditions.

What are some planning techniques that can be used to help an individual qualify for Medicaid?

There are a number of ways that individuals can become eligible for Medicaid, even if their income and resources exceed the limit.

"Qualified Income Trusts" can be used to deal with an individuals who receive too much income each month.

For resources, individuals and and couples can spend down their assets on items that will improve their quality of life until they fall below the limit.

Certain Medicaid specific annuities can be used to turn countable assets into a stream of income. 

Limited gifting strategies can also be employed. However, this must be done carefully with the guidance of an elder law attorney as there are severe financial penalties imposed if assets are given away improperly.

It is also possible to set up a special needs trust that allows the person receiving Medicaid to hold onto their own funds and use them for quality of life upgrades.

What are the consequences of not planning ahead for Medicaid?

If you do not have long-term care insurance, Medicaid can be a tremendous resource so you do not lose most of your assets to the cost of care.  However, you must plan ahead.

The best time to plan is a little more than five years ahead of the time you think you or a loved one may need long term care.  Crisis planning techniques can be utilized to limit some of the financial damage incurred by the high cost of long-term care.  But there is no question those who plan ahead save hundreds of thousands more for themselves and their families.

Don't wait until it's too late. Contact our office today to schedule a consultation. We'll be happy to answer all of your questions and help you get started on the path to peace of mind.

What are some of the drawbacks of Medicaid?

Although Medicaid can be a lifesaver in cases of extreme need, there are some drawbacks to consider. First, not everyone qualifies for Medicaid. The income and resource limits are very rigid, and many people find themselves unable to meet them.

Second, Medicaid is a government program and as such, it can be difficult to navigate. The rules and regulations are complex, and the application process can be daunting.

Finally, after a Medicaid recipient passes away, the state will seek to get reimbursed for the care expenses it covered for that person through a process called Medicaid Estate Recovery.  Often, the state will file a claim through probate court, or may file a lien on the home if the Medicaid recipient still owned it at death. The state is not permitted to pursue Medicaid Estate Recovery if the surviving spouse is still living.

Despite these drawbacks, Medicaid is still an essential safety net for millions of Americans. If you or your loved ones are in need of long-term care, don't hesitate to contact us to discuss your options.

What are some steps that can be taken ahead of time to qualify for Medicaid?

It sounds self-serving, but the most important step you can take is to go see an elder law attorney.  An elder law attorney can dispel the myths of Medicaid and explain what the law actually allows you to do.  

It is also critical that you update your financial power of attorney. Most financial power of attorney documents, even ones prepared by quality estate planning attorneys, do not contain specific authorities that give your loved ones maximum flexibility in preparing for a Medicaid application.

In addition, if you plan far enough ahead, you can establish an irrevocable Medicaid Asset Protection Trust.  This allows you to move assets out of your name and into the trust to protect them in a future Medicaid application.   

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Set up a consultation today.

Whether you're planning for your parents, your spouse, or even yourself, The Law Practice of Dennison Keller, LLC will meet you at the crossroads of legal and care advocacy to show you one clear path out of the maze and get you on the road toward your own peace of mind.

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