• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
< class="site-title" itemprop="headline">Flood & Masiuk LLC | Southampton Estate Planning Attorneys

Attorneys At Law

  • Home
  • Our Firm
    • About Our Firm
    • About The American Academy
    • Advantages of Working With Our Firm
    • Attorney and Staff Profiles
    • Speaker Connection
  • Estate Planning
    • Asset Protection and Business Planning
    • Estate and Gift Tax Figures
    • Estate Planning
    • Family-Owned Businesses & Farms
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning Services
    • Trust Administration and Probate
  • Elder Law
    • Are You A Caregiver?
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • DocuBank
    • Elder Law Resources
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
    • Estate Planning Resources
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Needs Checklist
      • Estate Planning Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Frequently Asked Questions
      • Frequently Asked Questions for Families Without an Estate Plan
      • Legacy Wealth Planning FAQ’s
      • LGBTQ Estate Planning FAQs
      • Trust Administration & Probate FAQs
    • LGBTQ Resources
    • Newsletters
    • Special Needs Resources
    • Trust Administration & Probate Resources
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Blog
  • Contact Us
Home / Estate Planning Articles / A Nursing Home’s Take on the Need for Medicaid Planning

A Nursing Home’s Take on the Need for Medicaid Planning

August 31, 2016 by Marianne Flood, Estate Planning Attorney

Compliments of Our Law Firm,

Written By: The American Academy of Estate Planning Attorneys

There has long been a misconception that nursing homes and Medicaid planning are on opposing sides of the proverbial fence. That misconception is starting to change as many nursing homes begin to realize that Medicaid planning actually helps ensure that patients qualify for Medicaid. In turn this ensures that the patient’s financial obligation to the nursing home is covered. Without Medicaid planning, a nursing home can find itself stuck with an exorbitant bill that the patient cannot pay and that non-spouse family members are not obligated to pay. All too often that leaves the nursing home with an uncollectable bill, which is why many nursing homes are reconsidering their support for the concept of Medicaid planning. In order to better understand how nursing homes perceive Medicaid planning, consider a couple of common real-life scenarios:

Scenario One: A nursing home admits a patient who has applied for Medicaid. The nursing home is under the belief that the resident has spent down all of her assets to under the $2,000 limit in the state of residence, making the resident appear to be eligible for Medicaid benefits. Unbeknownst to the nursing home, the resident still owns a piece of property in another state that she has had listed for sale for over a year. The resident has listed the property as “best offer,” clearly indicating her willingness to accept any offer made on the land. Unfortunately, there have been no takers. In practical terms, the property is worthless if no one is willing to pay anything for it; however, because the property appraised for $10,000, Medicaid considers it a “countable resource.” Consequently, the resident’s application for Medicaid benefits was denied and the nursing home was stuck with the bill.

Had the resident consulted with a Medicaid planning attorney ahead of time, a number of Medicaid planning strategies might have been utilized that would have resulted in a better outcome for both the resident and the nursing home. Even transferring the property to the nursing home when she entered the home might have produced a better result because she would have then been approved for benefits right away.

Scenario Two: A woman enters a nursing home and immediately applies for Medicaid based on the fact that she believes she has reduced her “countable resources” to under the program limit of $2000 in her state of residence. Knowing this, the nursing home accepts her under the assumption that her application for Medicaid will be approved and the bill she is incurring will be covered. Both the patient and the nursing home are shocked when her application for benefits is denied. The cause of the denial was apparently a life insurance policy with a face value of just $3000 and a cash value of $2,500. Everyone involved believed the life insurance policy would be considered an exempt asset. However, in her state, if a life insurance policy has a face value that exceeds $1,500 then the entire cash value of the policy becomes a countable resource. Therefore, she would not qualify for Medicaid until the cash value of the policy was “spent down.” In the interim, the resident has incurred a hefty bill for her stay at the nursing home. To make matters worse, the nursing home was informed that even if she spent down the value of the policy tomorrow and re-applied, Medicaid would not cover the bill the applicant had accrued to date, leaving the nursing home with no way to collect on the bill.

This scenario highlights the need to consult with a Medicaid planning attorney before applying for benefits. Had the applicant done that she likely would have been advised to cash out the policy prior to applying and apply the funds to her nursing home bill. Had she done that, she would have been eligible for Medicaid right away and her entire nursing home bill would have been paid. Instead, the nursing home wound up stuck with a bill for several months of care that it will likely never collect.

As the cost of long-term care continues to climb and the number of older Americans continues to increase, it becomes more and more important for nursing homes and patients to work together to ensure that the cost of a patient’s care is covered. One way to do that is to work closely with a Medicaid planning attorney as early in the process as possible. Doing so will ensure that the facility providing care is paid, allowing everyone to focus more on the quality of care instead of the cost of care.

About Marianne Flood, Estate Planning Attorney

As the founder and managing partner of the Southampton, Pennsylvania law firm of Flood & Masiuk, LLC, Marianne Flood oversees a practice devoted to providing clients with personalized service and counsel in all aspects of estate planning.

Primary Sidebar

Is Your Plan Outdated?

Change is inevitable! See if your plan is outdated and if you need to take action to protect your loved ones.
  • This field is for validation purposes and should be left unchanged.

Flood & Masiuk LLC | Southampton Estate Planning Attorneys

112 Lakeside Park
Southampton, PA 18966
Phone: (215) 322-6330
Fax: (215) 322-9199

MAP

map for Flood & Masiuk LLC office

Opening Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 5:00 PM

Footer

  • Disclaimer
  • Sitemap
  • Contact Us

© 2023 American Academy of Estate Planning Attorneys, Inc.

All Rights Reserved.
Attorney Advertisement

footer-logo
  • fb
  • twitter
  • linked-In