Planning to be eligible for government benefits.
However, Medicaid eligibility is means-tested. If you have unprotected assets, you will have to spend them to pay for the costs of medical services before Medicaid covers the costs. Unprotected assets include real estate other than your primary residence, money in bank accounts, Roth IRA plans, and may include 401k plans regardless of whether the plan is in payout status. A person can have a home (primary residence) worth up to $603,000 (in 2021) in Pennsylvania and still receive Medicaid benefits, but this home is later subject to Estate Recovery by the government. Pennsylvania Department of Human Services also has a brochure titled “ESTATE RECOVERY PROGRAM” that answers questions about Estate Recovery from the estates of Medical Assistance recipients.
The Medicaid program expects you to almost completely deplete your assets and become impoverished before stepping in to cover the costs of your medical services. The cost of long-term medical care or nursing home can drain even substantial savings quickly because these services cost over $11,099.04 per month in Pennsylvania ($364.90 per day in 2021), and the average stay in a nursing home is statistically about two years. The SSI-related (over 65 years old or disability benefits) Medicaid resource limits in Pennsylvania are $2,382 for a single person and $3,259.50 for a married couple receiving Medicaid. The resource limits are a little higher for individuals who are not receiving SSI, but not by much. The resource limit for individuals receiving Home and Community-Based Services (but no SSI benefits) is $8,000, but the resource of both spouses are considered if the individual is married.
Applying for Medicaid is not as simple as giving away everything to your children and becoming immediately eligible because Medicaid has a five-year look back period. The Medicaid program reviews all transfers made during the five years preceding the Medicaid application, and it calculates a penalty during which long-term health care or nursing home services will not be covered if some of the transfers are for less than fair market value or are gifts. The last 60 months of bank and financial statements may have to be provided to the Department of Human Services to complete the Medicaid application, and the Department will use the applicant’s Social Security Number to obtain information about his/her assets for the 60 months prior to the application.
The Medicaid look back period can be avoided with careful advanced planning, but the options that are available to you will greatly depend on a number of factors: your age, health, family situation, and whether you are planning to apply for Medicaid in five years, two years, or tomorrow. A knowledgeable attorney can help you plan in advance to be eligible for Medicaid benefits and to preserve most or all of your assets. Even in the worst case scenarios, if you are seriously ill and need Medicaid tomorrow, there are ways to save some of your money. Bucks County, PA Medicaid planning attorney Leonid Mikityanskiy will discuss with you Medicaid asset protection trusts, Special Needs Trusts, and other methods of preserving your assets and income.
Will Medicare cover long-term healthcare and nursing home?
When you reach 65 years of age, you can apply for and receive Medicare benefits. Medicare has several parts covering different medical services, and you should speak to a knowledgeable professional about Medicare coverage. However, Medicare simply does not cover all of your medical costs. For example, Medicare fully pays only for the first 20 days of stay at a nursing facility. After 20 days, you have to pay $170.50 per day (in 2019) up to 100 days, and the full cost of the stay after 100 days. Medicare also has co-pays for medical services that are significant for many individuals. Worse yet, many doctors drop out of the Medicare program because it is limiting in what it considers “reasonable charges”, so these doctors simply will not accept Medicare. Therefore, Medicaid is often the only alternative for individuals to rely on for their long-term care.
Will I need Medicaid to cover the costs of long-term healthcare or nursing home?
Medicaid eligibility rules are such that a person may live in his or her own home and receive full home care. What many people don’t realize is that the Medicaid program may take away the home after your death to pay for the cost of your medical care, which is called Estate Recovery, so proper advanced planning is necessary to preserve your family home. Medicaid also covers long-term hospitalization and nursing home costs. For example, the nursing home costs average over $10,000 per month in Pennsylvania. This staggering cost can leave nothing for your loved ones, the people for whom you worked so hard to accumulate your assets.
Bucks County, PA Medicaid Trust attorney Leonid Mikityanskiy will help you establish an irrevocable Medicaid Trust for to protect your assets, avoid lengthy probate and qualify for Medicaid services. Medicaid rules do not allow the Grantor to use the principal assets in the trust for the Grantor’s maintenance, but the Grantor may retain a certain degree of control over the trust estate and beneficiary designations. The Grantor may also reserve the right to use the income from the Trust if it does not affect Medicaid eligibility.
To see if you qualify for Medical Assistance in Pennsylvania, you can use the following link to Pennsylvania Department of Human Services Website.
Proper Medicaid planning and asset protection are important to ensure that you do not lose your family home and life savings if you need medical services or suddenly become ill. Medicaid Trusts and Medicaid-compliant annuities assist retirees in Medicaid planning.
At the Law Offices of Leo Mikityanskiy we focus on helping the elderly and their families with complex legal and family issues, including preservation of assets, long-term care planning, eligibility for government benefits including Medicaid, disability planning, establishing Special Needs Trusts and participation in Guardianship proceedings. We provide advice and counsel to ensure that your future planning is securely in place with the appropriate legal documentation, including Wills, Trusts, Powers of Attorney, and Health Care directives.
During our initial meeting with you, we will discuss the following issues:
- Identify and discuss all of your assets and income sources;
- Identify ways for your loved ones to receive the care they need, whether it is in a nursing home facility, personal care at home, adult day care center, or through at-home private care services;
- Explore your payment options for long-term care including Medicare coverage or Medicaid qualification;
- Develop a plan to protect your family’s assets and qualify your loved one for Medicaid as quickly as possible without having to “spend down” resources to the Medicaid limit;
- Protect the assets of a healthy spouse still living at home as much as possible, using community spouse protections existing under the Medicaid program (the Community Spouse Allowance ranges from $25,284 to $126,420 in 2019), and other planning tools such as Medicaid Qualifying Annuities; and
- Ensure the family home is protected from a Medicaid Estate Recovery lien.
Give your family members the peace of mind and financial security they deserve. Law Offices of Leo Mikityanskiy provides Elder Law assistance and Medicaid Planning for clients in Bucks County and Northeast Philadelphia, PA. Please contact attorney Leonid Mikityanskiy at our Feasterville, PA office at (215) 357-1400.
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