Common Legal Questions About Medicaid

Many older individuals, or caregivers dealing with caring for an aging parent, have questions about Medicaid and how to pay for the high cost of long-term health care. Medicaid is a state-administered program that pays for medical care for qualifying low income individuals over the age of 65. For many people considering long term care options for a spouse or parent, Medicaid may be one way to cover the high cost of healthcare or nursing home expenses.

To get an expert perspective on some of the most frequently asked questions regarding Medicaid, we turned to one of our Network Attorneys, Michael Gorman of the Law Offices of Michael D. Gorman, LLC in Holden, Mass. Please keep in mind that Medicaid laws vary in each state, so you will want to meet with an attorney in your state to discuss your particular circumstances and options.

How much money can I keep and still qualify for Medicaid?

Every state is different. If you are single and applying for Medicaid, generally you are allowed $1000-$13,800 over the course of your lifetime. If you are a couple, and both of you are applying for Medicaid, then you may keep as a couple from $2000 to $20,100. These figures are based upon the state in which you reside. If you are a couple, and one of you is applying for Medicaid, the spouse NOT applying for Medicaid may keep anywhere from $23,448 to $117,240. This is called the Community Spouse Resource Allowance.

Additionally, the assets stated above are countable assets. You may have exempt assets which do not count toward the figures above. Some of these exempt assets might include equity in your house up to a certain figure, a vehicle, burial contracts, burial accounts, burial plots, funeral contracts, clothes, medical devices and other belongings.

Will I have to sell my house to pay for nursing home coverage?

It all depends. If you had the foresight to transfer your property into a tenancy or trust which still qualified you for Medicaid, and made this transfer five years ago, then probably not. If you have long term care insurance, which meets Medicaid standards, then probably not. Even if you have not done these things, but you meet certain exceptions, such as having a spouse that is still living at home, or having a caretaker child, whose care kept you out of long term care for over two years, you still may be able to preserve the house for family.

Can I transfer my assets to my children before I go into a nursing home and still qualify for Medicaid?

In most cases any transfer would have had to take place over five years ago. There are some minor exceptions, but pre-planning is always a good situation.

If my spouse is going into a nursing home, can he or she transfer all of his or her assets to me and qualify for Medicaid?

Transfers between spouses is an exception to the five year look back period. Now remember, there is a limit to non-exempt assets that you may keep as the healthy spouse. (The Community Spouse Resource Allowance). If you have non-exempt assets beyond this limit, then you want to discuss with your attorney how to try and preserve these assets further. Many times an annuity might be a good consideration, but not the type of annuity you may have purchased for investment purposes.

How can an attorney help me with these issues?

A good elder law attorney can be a major help if it is a pre-planning situation, or a crisis situation. In a case where there appears to be a good amount of time before the client would need long term care, an attorney can suggest asset protection devices, gifting programs, estate planning, and estate tax advice. In a crisis situation, that same attorney can help preserve money for the healthy spouse, change previous estate planning documentation to address the current situation, and help the ill spouse apply for Medicaid.

Michael D. Gorman received his B.A. at Assumption College in Worcester, and his J.D. from Western New England University, School of Law. Mike worked for several area firms before opening his own practice, the Law Offices of Michael D. Gorman, LLC, in October of 2007. Mike provides all aspects of estate planning for his clients, including estate plans, elder law planning and transfers, Medicaid applications, special needs trusts, wills, trusts, powers of attorney and health care proxies.

The information contained in these answers should not be considered as legal advice. The author of these answers is licensed in Massachusetts only.

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