On the surface, this is a good question, but when you dig deeper, you find that Medicare does not pay for long-term care. Most seniors will need living assistance, and Medicaid will pay for it. This is why Medicaid planning is something that you should learn about.
There is an upper asset limit for Medicaid eligibility of $2000 for an individual, because the program was designed to provide health insurance for financially needy individuals. It can seem as though you could never qualify if you have accumulated a reasonable store of resources for retirement.
In reality, most seniors in nursing homes are enrolled in the Medicaid program, and most of them were never really poor.
People qualify for Medicaid through a divestiture of assets. This is often referred to as a Medicaid “spend down.” You could give gifts to your loved ones while you are living to get assets out of your own name, and you could subsequently qualify for Medicaid.
Waiting Too Long
Now that we have set the stage, we can look at the time factor. You cannot find out that you need long-term care today, give your children your assets tomorrow, and qualify for Medicaid the next day.
There is a five-year look-back. Any gift giving that you engage in must be completed at least five years before you apply for Medicaid assistance. If you give gifts within this five-year time frame, you will be deemed ineligible at first.
The period of ineligibility would be calculated based on the cost of long-term care in Pennsylvania as it compares to the value of the gifts. For example, if you gave away enough to pay for 18 months of nursing home care, you would have to pay out-of-pocket for 18 months.
This can equate to a lot of money, because a year in a quality nursing home can cost you more than $100,000.
Because of the five-year look-back, you must plan ahead in advance if you want to qualify for Medicaid without being penalized at all.
Medicaid Planning Report
You should digest all the information that you can when you are considering the impact of long-term care costs. Medicaid is the solution for most seniors, and we have prepared an in-depth report that will answer most of your questions.
This report is free, and you can access your copy through this page: Bucks County PA Medicaid Planning.
Contact Our Firm
If you would like to take things a step further, contact us through this page to set up a free consultation: Southampton PA Elder Law Attorneys.