Getting older is difficult, in many ways. The most obvious difficulty is the effects of aging on the body and, for some, their mind. But aging is also costly, in the financial sense. Most Americans are not as prepared as they should be to confront this reality.
There a few factors that account for this, and it is mainly the fear of aging and dying as well as resistance to talking about this issue with loved ones. There is also an aversion to talking about money with financial professionals as well as loved ones. However, it is vital that these discussions happen and that people, while healthy, plan for their future medical care. In planning for your future medical care, timing is important if not essential.
Assisted Living Facility vs. Nursing Home
Assisted living facilities are meant to give older people a certain sense of freedom and autonomy while also providing an environment where their basic needs are safely met. It is ideal for an older person who can no longer live at home safely. They are “private pay” in that medical insurance is not accepted; but long-term care insurance and direct payment is.
Unlike assisted living facilities, nursing homes offer medical care and supervision; they are a “step down” from a hospital. A resident can private pay their nursing home care, but they also accept insurance, specifically long-term care insurance and Medicaid. Medicare does not cover long term care in a nursing home.
Medicare is health insurance that all Americans are entitled to upon reaching retirement age; it is not a “means tested” program (meaning: your income does not matter). Medicaid, other the other hand, is a “means tested” program- and income is very relevant. Traditional Medicaid is a program for low income individuals as well as children.
Medicaid is also the program that a sizable number of older Americans use to pay for their nursing home care or “long term care.” But because it is means tested many of those Americans, who could be traditionally categorized as “middle class,” would not qualify for it---and here is where the elder law attorney comes in.
The process to apply for and qualify for Medicaid, particularly institutional (nursing home) care is complex. In simplest terms, nursing home Medicaid has a five year “look back period.” If a transfer of property or other assets that is not an exempt transfer under the Medicaid rules took place within the last five years it would deem the person illegible during a penalty period. The “penalty period” can range from a few months to a few years.
If the transfer(s) took place outside the five-year period, the person would be deemed Medicaid eligible immediately, provided they meet the other strict income and asset requirements.
Community Medicaid is long term care in the home. The five-year look back period is inapplicable for Community Medicaid but the strict income and resources rules still apply. Therefore, obtaining the services can still be a challenge as every county Department of Social Services has their own criterion -and this is a source of frustration since there is often no uniformity.
More detailed information about the income and resource rules are available at this link or by going to the Resources tab on the site.
In sum if you have assets, in the bank, investments or real estate, you will very likely need to plan to protect it. Veronica can guide you and your loved ones through the complex, and oftentimes paper intensive process of Medicaid planning.