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When Are You Eligible for Medicaid?

Jeffrey Asher, Esq. - April 19, 2011 12:13 PM

People are living longer. According to the National Center for Health Statistics, the average American life expectancy is about 75 for men and 80 for women. The number of persons aged 65 and over is expected to double by the year 2030 and the fastest growing segment of the population consists of people who are 85 and older. Issues of aging, mental disability, and long-term care will reach a critical point as early as this year when the “baby boom” generation first reached the age of retirement. For some, aging will bring continued health, enjoyable retirement, and financial freedom. For others, aging will bring mental disability, terminal illness, and poverty. For all, aging will bring an increased complexity to life.

The Need for Long-Term Care and Long-Term Care Solutions
Besides needing help with basic self care tasks, such as bathing, dressing, toileting, and eating, most people needing long-term care also need help making personal, medical and financial decisions. A proper Health Care Proxy and/or Power of Attorney will recognize the appointment of alternate decision-makers, and a good Elder Law attorney will help secure these written authorizations.

A good Elder Law attorney will also help evaluate the financial situation, prepare a realistic and appropriate budget to pay for long-term care needs, and, when appropriate, prepare more long-term planning solutions, such as qualifying for Medicaid benefits.

The Costs of Long-Term Care
According to the Genworth 2010 Cost of Care survey, a person aged 75 years needing long-term care in New York, for example, should anticipate paying, on average, around $48,000/year in home health care costs, around $40,000/year for assisted living facility costs, and around $117,000/year for nursing home costs. The national average is around $40,000/year for home care, around $38,000/year for an assisted living facility, and around $76,000/year for a nursing home. According to the same survey, a person currently 55 years old and anticipating care in 20 years’ time will pay, at age 75, approximately $129,000/year for home care, $104,000/year for an assisted living facility, and $310,000/year for a nursing home. Needless to say, this can become very expensive very quickly.

Medicaid Eligibility

There are generally two types of Medicaid coverage: Medicaid home care, which provides home health care, some hospital coverage, doctor appointments, etc. And, Medicaid nursing home care, which is care in a skilled nursing facility or similar institution.

To qualify for Medicaid, Medicaid recipients (whether for home care or nursing home care) may only keep a small amount of assets and income. As of the time of writing this article, a Medicaid recipient living alone, in New York, may keep no more than $13,800 in non exempt assets and have no more than $767 per month in income (both of these amounts increase depending on the number of family members who live with the Medicaid recipient). An individual in a nursing home or similar institution is restricted to a personal needs allowance of $50 per month. Income includes Social Security payments, distributions from IRAs and other retirement accounts, interest and dividends, etc. The actual income and asset thresholds vary from state to state, so be sure to consult with a qualified advisor in the state in which you and/or your loved one lives.

As a general rule, giving assets away to qualify for Medicaid is not permitted. A Medicaid applicant who does so is “penalized” – denied Medicaid benefits – for a period of time following the transfer. However, with the right planning and using the proper techniques, we can help structure a transfer of assets so that it does not result in a penalty for Medicaid eligibility purposes.

So what can a person do if he/she needs help, either in the home or in a nursing home, or anticipates needing help in the future? By following certain steps and techniques outlined by a qualified Elder Law attorney, the person can get the help they need now, or plan for it in the future. Eligibility comes with planning and getting the right advice.

Elder Care/Medicaid planning works for those people who want to preserve the assets they have worked hard to accumulate. The bottom line is that a proper Elder Care/Medicaid Plan enables a person to receive qualified care in their home, the community, in an alternate living facility, or in a nursing home – without having to give up everything to get it.

JEFFREY A. ASHER is a Partner in the Trusts & Estates Group, and head of the Elder Care Practice, at Eaton & Van Winkle LLP. Mr. Asher concentrates primarily in the areas of Elder Law and Medicaid Planning, Estate Planning, Asset Protection, Estates and Trusts Administration, and Special Needs Planning.

Using various techniques, Mr. Asher gives his clients the peace of mind knowing that their elder care and estate plans will protect them in the event they need long-term care, will protect their loved ones from the burden of paying for that care, and will pass down their assets to their loved ones with the least amount of tax and cost. Mr. Asher helps his clients navigate through the probate process after a loved one has died. Mr. Asher also counsels his clients in connection with planning for their Special Needs child
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