How Medicaid Planning Could Enable You to Prepare for Long-Term Care

Among the greatest fears of people in the United States as they get older is that they will be forced into a nursing home at some point in their lives.

There are plenty of reasons why individuals would want to avoid nursing homes, including a lack of personal autonomy and the huge costs of this care. Depending on the quality of care provided and the location of the nursing home, the cost for a single year’s stay could range anywhere from $40,000 to more than $150,000.

Unfortunately, many people are left with seemingly no option but to pay for their nursing home care until they completely drain their savings, at which point they may qualify for Medicaid benefits.

There are some advantages of paying privately. For example, you are likely to get into better nursing home facilities and may not end up having to deal with the public benefits process in your state. However, it tends to be much more expensive to do so.

By engaging in some cohesive Medicaid planning, you may protect your assets for your spouse and your children while getting access to the care you need.

‘Spending down’ to qualify for Medicaid

One of the best ways to plan for Medicaid is to strategically “spend down” so that you can qualify for assistance. There are several different expenses that will reduce the value of your estate that will not disqualify you from Medicaid.

Any assets you purchase must be non-countable under Medicaid rules. Examples include a home, a car, certain personal effects, some prepaid burial and funeral expenses and some types of household furnishings and supplies.

You may also pay off any legitimate debt as a means of “spending down” to qualify for Medicaid. Examples of what the government considers “legitimate debt” include existing credit card debt, mortgages, medical bills, taxes, car payments, utilities, rent and the costs of maintaining a home or motor vehicle. You can pay off these debts fully or partially.

Any payments related to your non-countable assets may also be used to spend down. Houses occasionally need repairs of certain improvements, such as new roofs, plumbing repairs, landscaping and electrical work. Even additions to a home or other home improvement projects that might not be totally necessary are still allowable expenses if your home itself is exempt.

Finally, Medicaid applicants can make payments for caregiving services, especially in situations when these services allow the applicant to remain in his or her home and avoid having to use expensive nursing facilities. A sibling or child may even deliver this caregiving service.

Medicaid planning can provide you with the ability to secure the assistance you need for long-term medical care. To learn more about sound Medicaid planning, meet with a trusted New York estate planning attorney at Lissner & Lissner, LLP.