Medicaid Planning

For most Americans, the possibility that they might have to someday live in a nursing home is very disturbing.   And the fact that they might have to give up all of their life savings and their family home makes it worse.  The cost of nursing home care is high, average cost for nursing home care in Louisiana is about $4,000 per month, or $48,000 per year.  At that rate, it is very easy to burn through a family's life savings in a short amount of time.

The new Medicaid rules make it tougher for nursing home residents needing financial assistance to qualify for Medicaid.   The rule changed the "look back" period from three to five years.  This means that when you apply for Medicaid, you will need to disclose all gifts made during the five years before the date you apply for Medicaid.  The penalty period was also changed.  Under the new rules, the penalty period does not begin until you spend down all of your assets and apply for Medicaid.

To qualify for Medicaid, you must submit a detailed, multiple page application and provide detailed proof of  all of your financial transactions ( banking, CDs, stocks, bonds, income, expenses, annuities, etc...) for the previous 60 months.

The laws around Medicaid qualification are extensive, and there are many exceptions.  Often, hospitals and nursing homes will offer to do a Medicaid application for you at no cost.  Be careful, they do not represent your interests, but rather those of the institution for which they work.  Even with the best intentions, they often do not have the legal knowledge necessary to determine whether or not your qualification is accurate.  This is where a legal professional can really be of value and often times, be able to get you benefits much sooner.

1. If I give away my assets can I qualify for Medicaid?
   No. If you give away assets you will be ineligible for Medicaid.
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2. Is my house protected if I go into a nursing home?
   Yes. The house is not counted as an asset so long as you have intent to return to it and the value is less than $500,000.00.
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3. When I die, can the State of Louisiana take my house?
   Yes. The state of Louisiana can recover expenses paid on your behalf out of your estate when you die. This only applies to nursing home and home based services paid by Medicaid at age 55 or after.
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4. Can I still give $12,000 away per year?
   No, not without it being considered a transfer. Many people believe you can give away $12,000 per year without affecting Medicaid eligibility. This is not correct.
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5. Is long term care insurance a good idea?
   Yes. If you can afford the long term care insurance premiums and meet eligibility requirements, the purchase of insurance is a very good way of managing the risk of an extended stay in a nursing home.
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