Medicaid covers the cost of long-term care, be it in a nursing home, assisted living community or care at home, if certain eligibility requirements are met. Due to the skyrocketing costs of long-term care, many people who need long-term care will need to consider Medicaid. Medicaid mistakes are common and can be devastating for a family. The following is a summary of the most common Medicaid mistakes to avoid.
- Not Considering Early Planning Options
Medicaid has a five year look back period. That means that when a person makes a Medicaid application, the state will look back five years for any improper transfers. Improper transfers are essentially gifts, the transfer of money or property for less than fair market value. A person can save a portion of their money or assets through the use of an appropriate trust and waiting out the five year look back period before making a Medicaid Application.
Executing an appropriate financial power of attorney with Medicaid Planning Authority should also be considered. Without a financial power of attorney with Medicaid Planning Authority in place, should the individual become incompetent and not have that appropriate financial power of attorney in place, his family will not be able to engage in Medicaid planning.
Individuals using family caregivers should also consider a Caregiver Agreement, an employment agreement that will allow the individual to transfer money or assets to the caregiver without penalty.
- Not Considering Planning Options as Soon as the Person Needs Long-Term Care
Once a person needs to enter a nursing home, assisted living or requires home care, it is not too late to plan! I repeat, it is not too late to plan! Many people hold the false belief that the five year look back period means that there are no planning options once a person needs care. This is incorrect! There are still many Medicaid planning options for both married couples and single people to save some, if not all, their money.
- Not Talking to an Attorney Before Filing a Medicaid Application.
There are certain circumstances where filing a Medicaid Application at the wrong time can have devastating effects for the applicant and his family. For instance, if a person transferred his house to his child four and a half years ago and made an application, he could be looking a long penalty period, that is a time when he has no resources left and needs long-term care but Medicaid won’t pay. Similarly, if a married person makes an application prior to exploring Medicaid planning options, he will have eliminated his ability to engage in the use of an annuity to benefit his healthy wife, a powerful Medicaid planning tool. These mistakes could have been avoided with the counsel of a Medicaid Planning Lawyer.
- Handling the Application on Your Own or Letting the Nursing Home Do it
There are people who apply to Medicaid and are approved without complication. The problem is that for the average person, it can be hard to identify when he is likely to run into complications or a denial, or not. The best approach is to have a consultation with a Medicaid Planning Lawyer who can review the situation and advise whether the application can be handled by the person or nursing home, or whether it should be handled by a lawyer. If a Medicaid application is made and the person does not qualify because of the value of his life insurance policy or the ownership of real estate for example, he may not learn until he is denied, at which time months of eligibility have been lost and the person is facing a debt of tens of thousands of dollars to the nursing home or assisted living.
For more information on Medicaid, contact a Cleveland Medicaid Planning Lawyer.