FREQUENTLY ASKED QUESTIONS: Medicaid
Ethan Huizenga, Medicaid Planning Attorney
A. Medicaid is a joint federal and state program to assist those with low income and limited resources. It can be used to help pay for medical services and long-term care.
A. Medicare is a federal insurance program that provides very limited long-term care coverage.
A. Long-term care is expensive, and these costs only continue to increase as baby boomers age. Although the range varies depending on where you live, according to the Genworth Cost of Care Study for 2020, the national median annual cost of a private nursing home room is $105,852 with a 3% annual increase projected. Here in Iowa, the average cost of a private nursing home room is just over $85,000.
A. Long-term care planning is a subset of elder law that is focused on identifying your wishes and expectations for when and where you will receive long term care (if needed) and how you will pay for it. In this area of our practice, we assist clients in planning for the transition into long-term care, meaning a nursing home, assisted living facility or in-home health care.
We also discuss options for paying for that care. One of the most frequently used option is Medicaid.
A. Medicaid planning is a lot like tax planning. Just like the tax code tells us what things we can write off or deduct, the Medicaid rules tell us precisely what actions are permissible and what assets you may continue to own even after you become eligible.
Medicaid planning starts by helping the senior determine if they are eligible for Medicaid coverage for their nursing home or assisted living stay. If they are not, the next step is identifying whether they could become eligible by creating a spenddown plan.
Once the spenddown plan has been implemented, the last step in Medicaid planning is submitting the Medicaid application. In addition to a 25 page application form, the packet of supporting information can include hundreds of pages of account statements and insurance documentation. A well-designed Medicaid plan will include an organized and efficient application packet that makes it as easy as possible for the Medicaid caseworker to process your information quickly.
A. Spenddown is the Medicaid term for the process of becoming eligible for Medicaid benefits. A person is required to spend down if their countable assets exceed the Medicaid limit of $2,000.
But spenddown does not have to mean paying money to the nursing home until it’s all gone. Spenddown involves reallocating countable assets into non-countable forms. Our Medicaid planning is often focused on helping you develop a spenddown plan that preserves as much of your life savings as possible.
Spending down can involve gifting or reclassifying assets and could include the creation of a Miller Trust or a burial trust. Each person’s needs are unique, and a detailed analysis of your financial situation will show which options are available.
A. Absolutely very much yes. What and how much depends on your specific circumstances.
For example: if your spouse is in the nursing home, Medicaid allows you to keep all of your own income, your house, and up to $130,000. At Huizenga Law, we can help you keep even more than that while still getting the best possible care for your spouse.
A. The short answer: no. It’s a common misconception is that you have to spend all your money at the nursing home before becoming Medicaid-eligible. The nursing home may even encourage you to write checks to the nursing home as a way to spend-down money.
But there are other options to gain Medicaid eligibility without spending all your money first. Certain assets do not count in the spend down, and other assets may be preserved to take care of your spouse or children.
For more information about spenddown and what your strategy should be, give us a call at 712-737-3885 and set up a mutual interview.
A. Medicaid looks back 60 months from the date of a Medicaid nursing home or home care application to determine whether you have made any gifts. The lookback period is an audit period during which time Medicaid has the right to review all of the financial records of the applicant (and the spouse of the applicant, if applicable).
A. Whether a period of ineligibility applies depends on the amount and date of the gift, the identity of the recipient, and the type of Medicaid benefit you seek. Transfers to spouses and disabled children are not subject to a penalty and additional exceptions may apply if the applicant transferred his or her residence. The transfer penalty can be shorter or longer than the lookback period.