Long Term Care (LTC) Medicaid is the federal and state government-sponsored healthcare program that provides coverage related to long term care needs to qualifying individuals in need of long-term or special needs care. It is distinct from Medicare, another government program with which is often confused, in that Medicaid covers the need for nursing home-level of care—a reality 33% of adults turning 65 in 2019 were expected to need at some point in their remaining life.
Qualifying for Medicaid: The Basics
LTC Medicaid is a program designed to cover individuals who need the level of care provided in a nursing home, such as older adults and people with disabilities. While LTC Medicaid applicants may have no more than $2,000 in countable assets (and not everything counts!), with proper planning, legal options allow middle-income and asset-owning individuals to qualify for LTC Medicaid coverage without needing to spend down their savings. Without proper planning, paying privately for LTC can easily cost $8,000 or more per month—an expense few can afford for long.
Starting early on a long-term care plan is important not only because—as indicated in our tagline, “Life Happens. Plan on It.”— nobody knows what tomorrow may bring and also because LTC Medicaid qualification involves a five-year lookback period to assess whether the applicant made gifts to determine if the applicant is eligible for services. The lookback period means that when you apply, your application must list every transfer made to another person or entity over the prior five years (60 months). “Uncompensated transfers,” which are transfers in which you did not receive equal value to what you transferred in return, are penalized according to the formula then in place and your long term care costs are not covered by LTC Medicaid during the penalty period. Strategic planning done outside of this five-year window incurs no transfer penalty. Emergency planning is also available and should be considered if you or a loved one needs long term care.
Building a Long-Term Care Plan
An experienced elder law and estate planning attorney is your best resource for building a long-term care asset protection plan. Working with your particular financial situation and unique family needs, an attorney can direct you toward the legal options best-suited to you. Such options may include spousal income and asset transfers, specific types of Medicaid-qualified annuities, or Medicaid Asset Protection Trusts—to name but a few.
Discussing the details of different planning options available to you is beyond the scope of the present article. If you would like to learn more about ensuring you will not deplete all of your assets to receive long-term care when you need it, please call our office at (757) 690-2470 or contact us via our website.