LONG TERM CARE PLANNING: SOLUTIONS

 

††††††††††† Many Americans believe that Medicare will pay for their long term care in a skilled nursing facility, but Medicare is not designed for this purpose. Under the best of circumstances Medicare will pay all of the first twenty days of skilled nursing care and a part of the next eighty days, but there are conditions that must be met for the Medicare patient to qualify. For example, a physical therapist or occupational therapist must certify that the patient is improving. If that certification cannot be made, all Medicare coverage for the nursing home stay ceases.

††††††††††† Medicaid is designed to provide skilled nursing care for those 65 years of age or older residing in a nursing home, but only if that patient is relatively poor. For 2014 a Medicaid recipient may not have more than $4,000 in countable resources or more than $2,163 in monthly income. When a person is otherwise qualified for Medicaid but has too much income, a Medicaid income trust can be established to qualify that person for Medicaid. There are certain assets that are exempt such as oneís home with equity of $500,000 or less, two motor vehicles and $5,000 of other personal property. However, at the Medicaid recipientís death, the State of Mississippi has a claim against the estate in an amount equal to all Medicaid benefits paid for long term care.

††††††††††† Congress is making it progressively harder for middle class America to qualify for Medicaid. It is hoping to shift the cost of long term care for a large portion of Americans to the private insurance industry. There are now many good long term care insurance products offered by excellent companies. If you are interested in purchasing this type of insurance the first step is to find a Certified Financial Planner or other long term care insurance expert, who you trust. But what if you are not insurable or cannot afford the premiums?

††††††††††† Some people transfer some or most of their assets out of their names in order to qualify for Medicaid. Is this legal? Yes, but there are conditions that must be met and pitfalls for the unwary. Currently there is a sixty month look back period for transfers out of the Medicaid applicantís name. This means that if you transfer countable resources out of your name and file for Medicaid within sixty months, there will be a severe penalty.

All transfers of assets out of oneís name have their risks. How does one know that the person to whom the gift is made will preserve it for you? Even if that person is absolutely trustworthy, there is always the chance that your assets will be lost to that personís judgment creditor or through a divorce. Some people transfer their assets to a specially designed trust, which eliminates those risks.

There are special planning opportunities for couples when one of them is going to the nursing home and the other is staying at home (the community spouse). Medicaid rules do not count transfers between spouses, so the nursing home spouse can transfer all assets to the community spouse. For 2014 the community spouse can have up to $117,240 of countable resources and unlimited income and the nursing home spouse still qualify for Medicaid. Even if the community spouseís countable resources exceed the maximum allowable, there are ways to convert countable resources into non-countable resources so that the nursing home spouse can qualify for Medicaid.

††††††††††† You do have long term care planning options, no matter what stage of the process you may be in. The attorneys at Dunn & Hemphill have extensive experience in long term care planning and can assist you and your loved ones with understanding this process, Medicaidís requirements and what planning opportunities may be available to you. Please contact our office to set up an appointment to discuss your concerns with one of our attorneys.

 



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Articles Written By David Dunn


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