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ALL THINGS MEDICAID Explore the 5 Year Look Back Period, Qualifications for Medicaid and Whether an Annuity Is A Good Choice For Your Specific Situation

John Reddan, The Eldercare Channel


Questions about Medicaid? We've put together the latest news ahead of the Affordable Care Act. As always, speak with your estate planning attorney to ensure you're both covered and in compliance with the various laws. Keep reading as we explore the 5 year look back period that, in recent years, became a crucial aspect of qualifying for Medicaid, qualifications for Medicaid and whether an annuity is a good choice for your specific situation.

QUALIFYING FOR MEDICAID IN A NURSING HOME There are state considerations for qualifying for Medicaid. This can cause some confusion since the guidelines aren't federal, therefore, there's no consistency (although there are similarities). What might work in New Jersey isn't necessarily what works in Minnesota. There are, however, general considerations (and in some instances, the rules are determined on a federal level – which makes an elder care attorney familiar with the logistics incredibly important in your efforts).

Cash Maximums First, a nursing home resident who is seeking Medicaid benefits must have no more than $2000 in assets. This is one of those state level decisions, so that number may be slightly different from one state to another. There are also rules that affect the spouse who is not in a nursing home facility. The community spouse, as he or she is referred to in these instances, is limited to owning just one half of the joint assets. In 2013, that figure is at $115,920. Naturally, those asset dollar figures can change from year to year – and they usually do based on the economy and inflation. That said, and as we discuss below, an annuity might be a good solution.

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Exempt Assets There are assets that aren't applicable in these calculations, including clothing, jewelry, furniture, vehicles and the home owned by the applicant. Keep in mind, though that in some states, a home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home; in other states, the nursing home resident must prove a likelihood of returning home.

5 YEAR LOOK BACK PERIOD It was controversial, but Congress established what it referred to as a penalty period for which coverage would be penalized to those otherwise eligible for Medicaid if it was determined an applicant unloaded his assets just long enough to qualify for coverage. Several years later, there remains some confusion about the look back period.

Penalty Period In order to prevent applicants from unloading their assets – such as placing it in someone else's name in an effort to hide it – a Medicaid “penalty period” was defined. It means coverage will be less than the full amount you otherwise would qualify for until the value of those assets were “paid”. Not only that, but if it appears the values of those gifts are incredibly higher, the law allows for an investigation even further back in time. The penalties are determined by how much you gave away times the average monthly cost of your care. Medicaid provides this

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example:

If you live in a state where the average monthly cost of care has been determined to be $5,000, and you give away property worth $100,000, you will be ineligible for benefits for 20 months ($100,000 / $5,000 = 20).</i>

Another perspective: for every $5,000 given away, subtract a month of eligible nursing home benefits.

FULL DISCLOSURE IMPORTANT For these reasons â&#x20AC;&#x201C; and many more â&#x20AC;&#x201C; full disclosure is always recommended. Your estate planning lawyer can help you cover those bases. Remember, it's not a deal breaker, and if you gifted some of your assets, it doesn't mean you won't qualify. It all depends on the market value, the time frame and a host of other factors. If you apply for Medicaid and you know there's something to be found in the look back review, be sure you tell your elder care lawyer. He knows the intricacies associated with the laws and potential problems. His goal is to always protect his clients; however, you can't be your own worst enemy in the process.

IS AN ANNUITY RIGHT FOR PROTECTING A MEDICAID APPLICANT'S SPOUSE? One of the biggest concerns for anyone filing for Medicaid qualification is how it will affect his or her spouse's assets. Will it leave the community spouse (the spouse not entering a nursing home) impoverished? And are the protections that are built into the laws enough? For some couples, an annuity might be a

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great way to ensure both are protected. An annuity has proven to be a fine avenue for a couple to ensure income for the community spouse without having any kind of Medicaid repercussions. There are qualifications that must be in place and an elder care lawyer can help your cover those bases. If these guidelines aren't in place, the annuity very could be seen as an asset transfer, which, of course, brings with it Medicaid penalties. It must be deemed an irrevocable annuity and the home state must be named a beneficiary. In other situations, different trusts might be better suited for an individual's needs. Finally â&#x20AC;&#x201C; don't forget the new healthcare laws that are sure to shake things up temporarily. Remember that the entire nation is making the transition at the same time, so don't underestimate the benefits of becoming the proverbial early bird â&#x20AC;&#x201C; it can mean a big difference â&#x20AC;&#x201C; not to mention less frustration as a whole.

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ABOUT THE ELDERCARE CHANNEL Launched in 2009, The Eldercare Channel is an extensive online directory of local senior care services. By providing reliable, up-to-date information, we can offer seniors and their families guidance through the world of senior care and help visitors to select services that may best meet their care needs. Our goal for The Eldercare Channel is to create the finest area resource for making senior care transparent and easy-to-understand for seniors and adult children trying to make the best possible senior care decisions. Our advice articles are written by experts in the field of eldercare and focus on issues involving in-home nursing, advances in senior medicine, estate planning, paying for care, Alzheimerâ&#x20AC;&#x2122;s care communities and other fundamental areas of the senior care world. The Eldercare Channel features a senior care expert as video host for each local area. Our video hosts know the eldercare service providers, recognize the solutions to senior care problems, and understand the need for accurate and timely information. Most importantly, they are available to our visitors to answer questions and concerns. Local senior care companies, agencies, and organizations are invited to have their own interactive display with room for up to six pages, each with the ability to feature unlimited videos, photos, and text, not to mention direct links to their websites. For more information about listings, please contact editor@eldercarechannel.com with your companyâ&#x20AC;&#x2122;s name, location, and specialty

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All Things Medicaid  

Explore the 5-year look back period, qualifications for Medicaid and whether an annuity is a good choice for your specific situation.