Protecting Your Golden Years

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Creating estate plans to protect Medicaid benefit eligibility

On Behalf of | Feb 5, 2018 | blog, Firm News |

When it comes to estate planning in the Atlanta area, many seniors do not realize that the federal government has programs like Medicaid to help protect them from becoming compromised at the end of their lives. They fail to consider how Medicaid benefits can help to reduce their out-of-pocket long-term care costs. 

It is important for seniors to structure their estate plans to maximize their Medicaid benefits. If they do not, they could end up using their assets to cover their end-of-life expenses and placing financial burdens on their loved ones. 

Stipulation on Medicaid eligibility

Health care costs are rising. Many seniors find they are unable to manage the cost of nursing home care themselves and have to rely on the government benefits. To qualify for Medicaid nursing home care benefits, they must meet eligibility criteria. One qualification stipulation is the five-year look-back rule. Applicants must disclose their financial transaction for the five-year period preceding the date of their applications. Any assets that they gave away or transferred are subject to penalty. 

Eligibility criteria and penalty

The penalty is a period of ineligibility for Medicaid benefits. The government determines the penalty period by calculating the cost of the transferred asset and dividing it by the median monthly cost of care. Until that period of time is up, they must use their personal funds and resources to cover their care expenses. 

It is possible for disqualified seniors to regain eligibility without satisfying the waiting period. If they can get the party they gave or transferred the disqualifying assets to return them, they can resume their eligibility for Medicaid benefits. If they only receive a portion of the assets and amounts from the disqualifying transfers, the penalty is recalculated to reflect a shorter period of disqualification. 

It is important for seniors and their loved ones to consider their long-term care needs in their estate plans to prevent complications that can lead to financial hardship and an interruption in care. People who want to maximize their estate planning strategy and take advantage of Medicaid benefit should consider speaking to an attorney for guidance.