Loudonville, Ohio                  

NOTICE: THIS DOCUMENT IS INTENDED TO OFFER GENERAL INFORMATION REGARDING LEGAL ISSUES. IT DOES NOT CONSTITUTE LEGAL ADVICE. READERS ARE ENCOURAGED TO CONSULT AN ATTORNEY FOR LEGAL ADVICE IN LIGHT OF THEIR OWN CIRCUMSTANCES.  

MEDICAID PLANNING BASICS

Admitting a loved family member into a long term care facility is a difficult decision in itself.  Unfortunately, there are important considerations aside from the emotional issues and one of those is how the long term care will be paid for.  This article seeks to set forth some of the issues to keep in mind when you are faced with this difficult decision. 

            There are several ways we see families deal with the expense of long term care:

            1.            Do no Medicaid planning – this involves being a private pay patient until the patient’s money and assets are depleted to $1,500 or less, at which time the patient is then eligible for Medicaid.

            2.            Do Medicaid planning with an attorney who is trained to do such planning – In this approach, a meeting is held with the attorney, the patient (or person who may be a patient in the near future), and any family members the patient wants to attend.  We take a look at what the person’s (or couple’s) assets consist of and compile a plan to suit the type of Medicaid planning the person is most comfortable with.  Some people want to save every dollar possible and take a very aggressive approach to the planning.  Other people are more comfortable with a more conservative type of planning which will save a large amount of money, but will involve slightly more time as a private pay patient.  A conservative plan might involve no gifting of money, but things such as a newer car, roof repairs, and pre-paid burial, for example.  There is a wide range of ways to do the planning, and it is always tailored specifically to your exact situation, as no two plans are ever the same. 

            3.            A hybrid of numbers 1 and 2, above.  We have worked with families where a loved one was in the nursing home as a private pay patient for years (and in one case, 7 years before doing any planning) and then learn of Medicaid planning and we establish a plan to preserve as much as possible with the remaining assets.  We have worked with families where tens of thousands of dollars was spent on nursing home care, where a Medicaid plan could have instead kept a large portion of that money in the family and expedited Medicaid eligibility. 

            Medicaid rules are significantly different depending on whether the patient is a married person or a single/widowed person.  A full explanation of the differences is beyond the scope of this article, but the important thing to take away is that with a married person, the best time to do the planning is PRIOR to the patient being admitted to a hospital or long-term care facility.  With a single person, the planning can be done at any time.  Obviously, the sooner the planning is implemented, the more saving that are available, but we are able to save a significant portion of whatever assets do remain.       

            When you have made the decision to do Medicaid planning, be sure to get a referral to an attorney who is knowledgeable about the Medicaid rules.  Likewise, be careful who you take advice from.  On more than one occasion, we have had families come in to the initial meeting with misconceptions that were passed on to them from well-meaning people, including nursing home staff, who are not familiar with the intricacies of the laws relating to Medicaid planning.  One seemingly minor mistake can be very costly in this area of law. 

            One of the misconceptions that we hear from clients most frequently is the “3 year rule” (also sometimes referred to as the “36 month rule” or “5 year rule” )  There is the idea passed around out there that you cannot give an asset or money away 3 (or 5) years or less before you go into a nursing home.  This is simply NOT an accurate statement!  What IS true is that any gifts or transfers made within 36 months prior to applying for Medicaid must be reported on the application.  There may or may not be a penalty attached to such a transfer.  With the planning techniques we use, we formulate a plan, knowing what the penalties will be, if any and account for that within the individualized plan. 

            A question that inevitably comes up when we are doing Medicaid planning is something to the effect of, “What if we get caught doing this?”  Medicaid planning is legal!  We do not conceal assets, but rather we use the Medicaid laws as they exist and we maximize them to our client’s benefit.  If fact, when we do the final Medicaid application, we disclose all gifts that have been made and assets that were purchased to attain eligibility.  There are certainly no “secrets” that we keep from the Medicaid caseworkers. 

  If you would like to learn more about Medicaid planning, please give us a call toll free at (866)994-4892 or locally at (419)994-4892 or click this link to contact us.

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