From the Financial Hotline
By: Financial Hotline
Summer 2020 (Vol. 38, No. 2)
Q: Will Medicare pay for a short term stay in a nursing home (skilled nursing care)?
A: If you qualify for short-term coverage in a skilled nursing facility, Medicare Part A pays 100 percent of the cost for the first 20 days. For days 21 through 100, you bear the cost of a daily copay, which is $176 in 2020.
Q: My wife will need long term care in the near future, and we have been told she is not eligible for Medicaid. The nursing home representative suggested I contact a Medicaid Planner. What is that and how can they help?
A: Medicaid is a Federal program, but it’s administered on a state level, so the rules and regulations can vary greatly depending on what state you live in. However, in most states, the applicant would need to have less than $2,000 in countable assets to qualify. Most people are ineligible because they have too much income, assets or both. Medicaid Planners help clients structure their financial resources and prepare documentation to ensure the best possibility of being accepted into the Medicaid program. They create trusts, manage asset transfers, and convert countable assets into exempt assets to ensure eligibility and preserve a family’s resources and can also protect a family home from Medicaid recovery. As the healthy spouse, they can also help you structure your finances to ensure you have adequate income and resources for your support.
Q: What does “countable” asset mean?
A: Each state has rules regarding what assets or income aren’t counted towards the Medicaid limits. For example, Most states will not count the value of equity in your home or half of a couples assets up to $128,640.
Q: How much can I expect to pay for Medicaid Planning?
A: Even in the same area, fees can range from as low as $3,000 to over $10,000 depending on the provider. A more complicated case may affect the cost as well. However, the average cost of working with a Medicaid planning professional is generally less than the cost of one month’s care in a nursing home.
Q: Can I get free help with Medicaid Planning?
A: Yes. But only if you meet the criteria for free help. Sites like the American Center for Aging have tools to help you determine eligibility such as www. medicaidplanningassistance.org. You can also get more information at www.Medicaid.gov or apply through www. Healthcare.gov. As a rule of thumb for the year 2020, a single individual, 65 years or older must have less than $2,000 in countable assets and countable income under $2,349 per month to be eligible.
Again, exact numbers will vary by state, but in general, If you have countable income and assets that are over the limit but still under $15,000 (or $30,000 if married), you can probably handle the planning yourself with simple options like spending down or an irrevocable funeral trust.
For those with more income and assets (and time to plan), you may find more affordable options like Life Resource Planners (sometimes referred to as Eldercare Resource Planners) These advisors take a larger, holistic view of how to help families plan for paying for aging care. As with Medicaid Planning professionals, their fees must be paid for out-of-pocket. However, Eldercare Resource Planners typically charge 50% - 75% less than Medicaid Planners.
Q: How Does the Medicaid Planning Process work?
A: It’s very similar to what you need for Estate Planning. You will typically set up a consultation and provide the planner with details about your income, assets and financial accounts. The planner will want to know how each asset is titled and what is the current value. If you need immediate long-term care, they will also need details about the medical issues and what type of care is needed. They use this information to determine whether they can help you accomplish your goals and also how much they will charge.
Depending on the strategy, it can take several weeks or months to get everything put together and agree upon a plan. If you have an immediate need for Medicaid care, the Medicaid application documentation can be prepared simultaneously and your loved one could be accepted at a facility as “Medicaid Pending”. In some cases, Medicaid coverage can even be made retroactive.