Medicaid: Don’t Try This At Home

By Kathleen Michalak

“Live long and prosper” is a blessing made famous by the TV series Star Trek.

But living a long life can be a mixed blessing, when care needs increase, and finances decrease.

When assets are depleted, Medicaid is a safety net you want to look into. It often covers the cost of long-term care either in nursing homes or in the community.

Beware of unintended consequences

Applying for Medicaid is a complex process, and the average person can easily make mistakes that have unintended consequences, putting even more pressure on financial resources.

Our advice to you is to get help from an elder law and estate planning attorney who will help you understand your options and stand by you throughout the journey.

Who is eligible?

To be eligible for Medicaid, an individual has to fall into one or more of the categories set forth by the state of Connecticut. He or she must have assets of $1,600 or less, and income of $2,829 or less per month. A home and one car are not considered countable assets.

Start planning now

Well before reaching this point, many families start planning ahead.

For example, if an individual’s income is higher than the limit of $2,829 the excess amount can be diverted into a pooled trust.

Or if his or her assets are more than $1,600, “spending down” is a way to pay for care or other needs such as

Eyeglasses
Dental work
Home improvements such grab bars, wheelchair ramps, or even adding a bathroom to the first floor for accessibility
Purchasing a prepaid funeral contract is another strategy for spending down.

Avoid this common mistake

Some of the common mistakes people make can have negative consequences that may be costly.

Medicaid has a “look-back” period of five years. That means if you are applying for Medicaid, any assets you gave away during the past five years could trigger a Medicaid penalty period, a time when you are not eligible for Medicaid.

If you gave a family member $25,000 toward a down payment on his or her house that would mean you would have to wait about two months before Medicaid would pay for long-term care in a nursing home.

Alternatively, you could ask for the money back, but often it’s no longer available, and you could be on the hook for two months of care in a nursing home – an average of $14,524 per month!

Strategies that work

Some of the many Medicaid planning strategies we look at, depending on the situation are:

Reverse mortgages
Single premium annuities
Asset protection for the community spouse
Spending down
Pooled trusts

Applying is only the first step

There’s a lot more to applying for Medicaid than collecting all the documentation needed for the application – which is a prodigious amount!

In the very best case scenario, it could take two months to be approved, but more often, the Department of Social Services requests additional information.

With lots of back and forth, the process could take six months or longer.

Don’t go it alone

Our recommendation? Don’t go it alone.

There’s too much at stake to take chances. The best strategy is to plan ahead – and work with an elder law firm who knows the law , and can help you make the most of your assets while providing the best possible care for your loved one, either at home or in a nursing home.

Buyer Beware: Choose Your Medicaid Application Support Wisely
5 Things You Should Know Before Applying for Medicaid in Connecticut
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3 Things You Should Know About Medicaid
How to Apply for Medicaid (Hint: You’ll Need Big Binder Clips)