Medicaid Facts

6 Biggest Medicaid Long Term Care Mistake or Why We Lost Mom and Dad’s Lifetime Earnings When We Didn’t Have To

1. Not realizing the gargantuan cost burden on a family when a loved one needs assisted living or nursing home care. 

  1. Medicare does not cover nursing home costs.
  2. Medicare covers only up to 100 days of rehabilitation in a nursing facility when an elderly person suffers an accident or medical emergency.
  3. Monthly costs in a nursing home in Ohio average around $6,700 per month.  Will you or your family have a spare $80,000 per year lying around to pay for nursing home care?
  4. A family member only qualifies for Medicaid if they have under $2,000 in assets and have under $2,382 in monthly income.

2. Not planning ahead.  Odds are someone in your family will need Elder Care with in-home help, assisted living or nursing home care.  And, consider the following:

  1. Americans are living longer,
  2. And  becoming vastly wealthier.  A modest income over a single or double/married lifetime could mean a paid for house, some (401)K/retirement savings and some money in the bank or investments that could easily allow a couple to be worth $200,000 or much more in their mid to late 60’s.
  3. Health care is becoming more expensive by the day.
  4. Elder caregiving by family members is decreasing rapidly over time because of delayed child-bearing, a wider geographical dispersion of children and more workplace opportunities for women.  These factors mean fewer  family members are around to provide the care.
  5. Living longer with higher medical costs means that costs for medical care in our autumn years is increasing exponentially
  6. Higher costs for longer periods of time and less family caregiving means more and more regulations to stem the massive cost burden on the states and the federal government.
  7. The pressure on the government to cut costs means more services are being sent to private companies meaning more oversight is needed.

3. Listening to anyone who tells you to “spenddown” everything before qualifying for Medicaid.

They mean well but are not experts in your family’s financial situation or in-depth Medicaid regulations.    Here is a story which happened to a friend of a friend in Southern Ohio.

“My widowed dad had to go into a nursing home memory unit after his Alzheimer’s progressed and we could no longer take care of him.  He had a nice retirement 401k and some savings.  The nursing home business manager told us that they would accept dad, he could private pay in a “spenddown” and when his 401k and savings were depleted, he would qualify for Medicaid.

Later I talked to a neighbor who had worked with a Medicaid attorney and found out it was not necessary to have spent down everything.”   Careful planning with an expert could have saved the vast majority of what dad had.

If you are single and you need assisted living or nursing home care, did the facility tell you about these asset and income savings techniques?

The Disabled Child/Caretaker Home Allowance?

The (401)K or Pension Plan Payout Exemption?

The Intent to Return Home 6 month Exception?

The Gift Plus Annuity Special Planning Exemption?

If you are married and you or your spouse need assisted living or nursing home care, did the facility tell you about all of the above asset saving planning techniques, or the Well Spousal Allowance of well over $100,000?

If these exemptions were not explained, did they tell you that you must spend down everything to qualify for Medicaid?  (By the way, 100% spenddown is NEVER necessary.)

If you were not told about any of the above, you should seek out advice from an Elder Law attorney before committing to spending down everything.

4. Giving away a house or a large amount of money to children.

Some think giving away the house and cash to children avoids Medicaid asset limits.  This is false and may cause all kinds of problems.

Medicaid asset calculations take into consideration any large gifts made within the last 5 years.  If you have transferred a house to your children, Medicaid considers this a gift and depending on the value of the house, could declare you 100% ineligible for any benefits.

5. Thinking an Elder Law attorney was too expensive.

Anyone hiring an Elder Law Attorney to perform Medicaid tasks will save you and your family many times more money than she or he will ever cost.  Why not get a free consultation to explain your options?

6. Not understanding or planning for Medicaid Asset Recovery.

Here is a story I read recently which happened in North Carolina which is a very common occurrence.  “ My mom needed a nursing home and my dad was still with us.  We were told dad got to keep the house.  But after mom died, and dad died shortly after, our probate attorney told us that Medicaid had a $72k lien on our house.  We never knew this.”

Advance and crisis planning takes into account Medicaid Asset Recovery which is the attempt by the Medicaid administration to recoup costs.   Many people perform acts which unknowingly expose assets which otherwise would go to children or other family members.  Only careful planning with a qualified Elder Law attorney can shield as much as possible of your hard earned life savings from asset recovery.