No one wants to go into a nursing home, and no one wants to put a family member in one. Sometimes, though, a nursing home or long-term care facility is the only way to make sure a loved one is safe and receiving the level of care they need. On the heels of making the decision that a loved one needs nursing home care comes the question, “How will we pay for it?”
It’s a good question. The average annual cost of a private room in a nursing home in Arkansas is around $60,000. Because that is an average, in some places in the state, the cost is even higher. Few families are able to pay for that kind of care out of pocket for long. And Medicare, the federal health insurance program for seniors, does not pay for most nursing home care. The result is that many people are faced with the prospect of using their life savings, assets they planned to leave to their families, to pay for their own care.
Fortunately, Medicaid, the federal health insurance program for people with low income, can pay for nursing home care for seniors. Unfortunately, in order to qualify for Medicaid, a person must not only have a medical need for long-term nursing care, but they can only have a very limited amount of income and assets. This results in many people “spending down” their assets in order to qualify for Medicaid assistance.
For 2019, a Medicaid applicant may only have $2,000 in “countable assets,” and no more than $2,313 in monthly income. Certain assets are considered “non-countable,” including a primary home and vehicle. Most other assets you’ve worked years to save, like bank accounts, retirement accounts, investment accounts, and a family vacation home, all count against you when you are applying for Medicaid.
If the obvious solution seems to be giving away assets to family members in order to qualify financially for Medicaid, the government has already thought of that. There is a five-year “look back” period for Medicaid applicants. If applicants have given away assets, or sold them for less than their fair market value, during the five years before applying for assistance, they may be denied Medicaid help, or their eligibility may be delayed.
The purpose of the Medicaid rules is to prevent fraud, not to impoverish families. People who may someday need Medicaid do not need to “spend down” all their assets, just those that the program deems “countable.” What that means is that with strategic planning, you or a loved one can qualify for Medicaid when it is needed, while still protecting assets for loved ones.
It’s never too early to plan, but before you know it, it could be too late. The attorneys at Crouch, Harwell, Fryar & Ferner, PLLC, are experienced in guiding Arkansas families through the process of planning for possible Medicaid needs down the road.
While it is obviously best to plan early, sometimes an urgent need for help arises. Even a young person can have an accident or sudden illness that makes nursing home care necessary. If planning ahead isn’t possible, working with an experienced Medicaid planning attorney is still worthwhile. A knowledgeable attorney can identify strategies to reduce countable assets and maximize the assets left for family. These strategies may include:
The prospect of placing a loved one in a nursing home is fraught with enough stress. Don’t let financial concerns add to the anxiety. Putting together a Medicaid plan with a trusted advisor can give you peace of mind and allow you to focus on what is truly important: the health and well-being of your loved one who needs care.
If you have questions about Medicaid planning, you do not have to find the answers on your own. We are available to assist you with all of your long-term care planning needs. Contact us today at (479) 751-5222, by e-mail at email@example.com, or using our contact form to discuss how you and your family can benefit from our years of experience.