Americans are living longer, and as such, more seniors are needing long-term care as they age, including nursing home care. The average time that a senior will spend in a nursing home is 30 months, and the costs range anywhere from $4,000 to $8,000 a month. As a senior’s funds start to run out in paying for such care, many will look to Medicaid benefits offered by the federal government and administered by the state of Florida to help offset the costs.
The Medicaid program is structured to help those who are in financial need, are disabled and elderly, and pass a series of means-based tests. These tests include income levels, assets, and other income variants to determine each person’s eligibility.
Eligibly Mistake 1: Relying on Outdated Information
In 2006, the way Medicaid penalty periods were calculated changed. Before, individuals could gift half of their assets to their spouse or child. This strategy was called “half-loaf” and helped to protect assets for families. Now, penalty periods start when an individual applies for Medicaid and asset/income levels are met. It’s important not to rely on old information or strategies that you may have used to help a loved one qualify for Medicaid in the past. Make sure to talk with an attorney so you have an accurate timeline of what you can do and when to qualify for benefits.
Eligibility Mistake 2: Not Paying Attention to Look Back Periods
Another thing you cannot do is to transfer ownership of assets, such as a house or bank accounts, before applying for Medicaid. This type of transfer will be quickly flagged by the federal government and will be subject to a “lookback” period. You may be penalized for such transfers and may have to wait a certain period of time until you can collect benefits, or you may become ineligible altogether. Timing is crucial to ensuring eligibility and asset protection, which is why it is essential to discuss any assets transfers with an estate planning attorney.
Eligibility Mistake 3: Not Understanding How Financial Tools Fit into the Medicaid Puzzle
Annuities add another level of complexity to financial planning. Annuities, a type of insurance policy you can pay into to ensure you do not outlive your money, were previously able to be used to help plan for Medicaid. However, the laws have changed regarding annuities. Annuities now have multiple restrictions on them, including requiring the state to be named the beneficiary of the annuity. Again, talk to a lawyer if you are considering this planning tool.
Getting Help
Planning for Medicaid can be incredibly impactful on your future, but it must be done the right way. Our elder lawyers are here to answer your questions and help you create a safe roadmap toward qualifying for benefits that you may need to pay for care in the future. To schedule an appointment at our Brandon office, call (813) 438-8503.