Note: It is important for a senior and a senior’s family to know where the senior is in the aging-in-place, continuum of care forecast. While Birchez communities are clearly oriented towards aging in place in an affordable setting, it is important for the family to consider the overall picture:
Written by Anya Kamenetz, Tribune Media Services
Poughkeepsie Journal, January 9, 2012
One day, most of us are likely to have an elderly family member who needs round-the-clock care. Putting a transition plan in place now can save you significant money, time and headaches down the road. Medicaid, the state-federal health care program for the poor, pays for about half of all nursing home care in the U.S.
Diana Adams is an attorney in private practice in New York State doing eldercare law. She’s also currently applying for Medicaid for her elderly father. “If families are not prepared, the cost of long-term care is going to quickly absorb all the family’s assets,” she says. “This kind of issue is one of the reasons many middle-class people don’t end up with an inheritance.”
This column will focus on qualifying for Medicaid while protecting your assets. A future column will look at other options, such as long-term care insurance.
1) What can I keep?
When someone goes into a nursing home, he or she can retain up to $13,800 in assets. Any spouse or dependent, if still living independently, is entitled to keep his or her house and a car. On top of that, the so-called “community spouse” can also hold onto at least $21,912 and up to $109,560 of the couple’s joint assets. All of these figures increase with inflation each year and vary by state. You can also use some assets to purchase a prepaid funeral plan.
2) What might I lose?
Besides that house, car, funeral plan and sum of cash, everything else a couple owns is fair game to pay for nursing home care, which costs a median of $115,000 annually in New York state and $62,000 in Alabama. When you apply for Medicaid, the state looks back at your financial records for five years to establish that you have no further money to pay for care out of pocket. If you put the title of your home in a child’s name or transfer money into a grandchild’s college fund during that five-year look-back period, the government is entitled to take those assets. They will even take the payoff on a life insurance policy. So if you have any reason to believe that someone in your family might need care within five years, now is the best time to hire an eldercare attorney and look into setting up a Medicaid trust or other transfer of assets to try to preserve your inheritance.
3) What’s the application process like?
Most states maintain websites that give you an overview of the process. In brief, you need your Social Security number, tax returns to prove income from federal benefits or private pensions, information on your assets such as bank accounts and insurance policies, a marriage certificate (if any), proof of address such as a mortgage statement or piece of mail, and insurance and Medicare benefit cards.
4) What happens next?
Once your relative is approved for Medicaid and safely placed in care, it’s time to turn your attention to the community spouse or dependent.
Be cautious and always consult a professional who is familiar with the laws in your particular state before attempting any steps to shield assets from Medicaid, be it a trust, a transfer or a gift.