Are you planning on Medicaid as part of your long term care? Here are some things to consider.
The Purpose of Medicaid:
Medicaid is a federally funded health care program. This is a “needs based” program and is administered by each state. Medicaid will help pay for long-term skilled nursing care in a nursing home, but the resident is responsible for contributing his/her monthly income toward the cost of care. Medicaid eligibility is based on income and assets.
If I seek Medicaid, will the state take all of my property?
At no time during a nursing home resident’s placement will the state “take” property. When determining Medicaid eligibility, Medicaid will categorize all of the applicant’s property as exempt or non-exempt. If your non-exempt assets/income are above the allowable limit, you will simply be declined assistance. After a Medicaid recipient nursing home resident’s death, however, the state will seek “estate recovery” under Georgia law.
What is Estate Recovery?
As of February 2007, Georgia initiated an estate recovery program. Although there are assets that are exempt from being taken into account for Medicaid qualification as long as you are alive, such as your home, there are laws that require the State to attempt to recover, after your death, the payments made on your behalf to a nursing home. Both Federal and State Laws now require that the State attempt to recover these funds and may recover them from your probate estate and, in some cases, from your non-probate assets as well. This is a debt of your estate that will have to be paid. The rules in this regard are constantly changing.
Will Medicaid or Medicare pay for long term nursing home care?
Medicare only pays for short stays in a nursing home and it must be following a hospitalization, and even then co-pays may be owed. Supplemental Medicare insurance may cover some of those payments also. Never will Medicare coverage last more than 100 days.
Do nursing homes consider the course of payment when determining admission?
Nursing homes may very well be selective in their admission requirements when considering the source of payment. Once admitted, nursing homes are prohibited from differential treatment of residents because of payment and employees are not privy to a resident’s source of payment.
Medicaid planning, are there limits?
There are indeed many limitations in Medicare Planning. Medicare planning is most appropriate for an individual when it is clear that, because of a nursing home stay, that individual’s savings will dwindle quickly. There are several methods in Georgia for an individual to still have access to their funds in varying degrees even after implementing Medicaid planning. There are resource eligibility rules, look back periods, and much scrutiny. In 2013 the standard income limit for an individual is $2,252. Any monthly income above that level will make that individual in-eligible for Medicaid in 2013. In almost all circumstances, Medicaid will not cover the cost of “Assisted Living.” Custodial care does not fall within the coverage of Medicare.
Long Term Care Insurance:
When the possibility of Nursing Home care is not in the near future, seeking long term care insurance is always the advisable route to take if possible. If one implements Medicaid planning when nursing home care is not certain and in the distant future, there is the risk that the laws will change (as they often do in this realm) and prevent such planning from being effective. Long term care insurance is an excellent option for those who are insurable and long term care is not in the immediate future.
The Use of Trusts for Medicaid Planning:
The use of most Trusts for Medicaid planning is fraught with complication and scrutiny. The use of an irrevocable trust may provide some benefit if the trust is fully funded and settled at least 5 years prior to Medicaid application. An irrevocable trust cannot be changed or cancelled and must be fully funded upon creation. The type of irrevocable trust used in Georgia for Medicaid qualification purposes is a “Miller Trust” (below).
What is a Miller Trust?
In 2013, if an individual’s monthly income exceeds $2,252, a Miller Income Trust can be executed to gain eligibility. A Miller trust is irrevocable. If executed and funded correctly, this type of trust serves as a conduit for an individual’s income, thus shielding it from being counted for Medicaid Eligibility. There are very strict rules governing what of that income can be made available to the individual. Any funds remaining in this type of trust upon the death of the Medicaid recipient must be used to reimburse the State of Georgia.
Summary:
When the possibility of Nursing Home care is not in the near future, seeking long term care insurance is always the advisable route to take if possible. If Medicaid planning is necessary, it must be carefully thought out with the help of an attorney who specializes in Medicaid Planning. Medicaid planning is closely scrutinized by the State of Georgia.
* This document is purely informational in nature. This information does not constitute legal advice.
- Are you planning on Medicaid as part of your long term care? Here are some things to consider. - October 15, 2014
- Death and Property: The process of probate. - October 13, 2014