Most seniors will need help with their day-to-day needs eventually, and Medicare does not pay for long-term care. Medicaid does pay for living assistance, but you have to take certain steps to protect assets if you are aiming toward Medicaid eligibility.
Need-Based Health Insurance
As most people are aware, Medicaid is a need-based government run health insurance program. Since the program is intended for people with financial need, there is an asset limit of $2000. If you are applying for Medicaid to pay for long-term care, your countable assets cannot exceed $2000 in value.
Some of the things that you own are not counted, and if you are married, your spouse can keep a certain store of assets. Your home is not a countable asset, and there is no equity limit if your spouse is remaining in the home.
This can sound like something that is entirely positive. If you are single, you can still potentially qualify for Medicaid coverage, even if you retain ownership of your home, as long as you don’t have more than $2000 in countable assets.
To divest yourself of countable assets, you could engage in measured acts of gift giving. In essence, you could give your family members their inheritances in advance. However, there is a five-year look-back. The gift giving must be completed at least five years before you submit your application for Medicaid.
If you were to give away assets within this five-year window, your eligibility would be delayed.
The Medicaid program is jointly run by the federal government along with each state government. Under program rules, the states are required to seek reimbursement from your estate if you qualified for Medicaid to pay for long-term care.
Because of the limit on countable assets, your home could be the only thing that you still own that is part of your estate at the time of your death. The home could be attached by the Medicaid program.
One way to protect the home would be to give it to a family member at least five years before you apply for Medicaid.
There is another possibility. If an adult child was living with you in the home for at least two years prior to the submission of your application for Medicaid coverage to pay for nursing home care, you could give your child the home without violating the five-year look-back.
Plus, the home would not be in play during Medicaid recovery efforts.
If you take the right steps in advance, you can protect assets as you brace yourself for long-term care costs. Our firm can help if you would like to dig deeper. We offer free consultations, and you can send us a message through our contact page to set up an appointment: Smithtown NY Elder Law Attorneys.