Preserving Medicaid eligibility: a vital part of long-term care planning

In order to preserve assets for loved ones and avoid jeopardizing benefits, it is important to plan for long-term care.

Due to advances in such fields as medicine, agriculture, technology, housing and others, Americans are living longer, more fulfilled lives than ever before. This can even be the case after suffering a major health setback like a serious illness or injury, due to the availability of in-home and residential care providers. The problem, of course, lies in paying for such services. In-home caregivers are paid anywhere from $10 to $100 per hour (depending on such factors as location, experience, distance, travel time and the level of care being provided), while nursing home facilities can start at around $20,000 per year, with some costing $100,000 or more annually.

Even if an elderly or infirm person has been financially responsible and saved a good deal of money, these exorbitant expenses can quickly deplete the value of their holdings, meaning not only will they need a new source of income to pay for their care, they also will be unable to pass anything along for the care and well-being of their loved ones in the future. It is a tragic situation that many have encountered over the years.

This doesn’t mean that all hope is lost, however. With careful thought and consideration, it is possible to use estate planning tools like wills, trusts, gifts, exemptions and more to protect some assets for the future while still covering the costs associated with round-the-clock care. One method is specifically known as “Medicaid planning.”

What is Medicaid, and how is it relevant here?

Medicaid is a government program that provides benefits for the medical treatment of lower-income people. It is a taxpayer-funded program, and if you’ve ever received a paycheck, chances are that some of your hard-earned money has contributed to it. If you are in need of care and have less than a threshold amount of income and assets, you may be eligible for the program.

Though there are limitations and potential drawbacks, the majority of elderly and disabled people in nursing homes and other residential care facilities receive some government benefits to fund their care. For example, some facilities may not accept patients who pay with Medicare or Medicaid, in-home assistance might not be covered, and some doctors choose to no longer work with the program because of the “red tape” involved. Those drawbacks notwithstanding, the program is of vital importance to countless patients who would otherwise not be able to afford much-needed residential care.

Planning ahead to preserve Medicaid eligibility

It is important to keep in mind that Medicaid planning isn’t meant as some sort of “shelter” that allows multi-millionaires to hold on to their family’s inheritance while having the government pay for their care. It is, however, ideal for families who just want to preserve some assets – like the family home, a reliable vehicle, heirlooms or education funding – for the next generation while still having their needs met. This can be done by taking advantage of statutory income and asset exemptions, placing money or property in a trust for the advantage of the person needing care and through other legal methods.

Through the use of careful estate planning, it is possible to protect your property without jeopardizing your eligibility for important government benefits like Medicaid, Supplemental Security Income, Medicare or Social Security Disability. For more information about this and other estate planning topics, speak with an attorney at Stockton & Stern, LLC. You can call them locally in the Gardner, Kansas, area at 913-856-2828, toll-free at 913-856-2828 or contact them online.

Keywords: Medicaid planning, estate planning, wills, trusts, government benefits, Medicare, Medicaid, long-term care