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Medicaid Crisis Planning

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Sudden Changes and Big Decisions

Change is life's only constant. Sometimes these changes strike without warning. If you or a loved one has experienced a sudden illness or serious accident, you understand how abruptly everything can change. Are you or a loved one suddenly in need of nursing home care? Finding and affording quality care on short notice can be stressful and draining. While we do not provide Medicaid Crisis Planning services, we can refer you to an Elder Law attorney when you are ready to determine the best options for care and even how to qualify for Medicaid to help finance them.¹

Long-term Care: Counting the Cost

Long-term care is expensive, and these costs only continue to increase as baby boomers age. According to the American Association for Long-Term Care Insurance, the annual cost of care will double in the next 20 years, increasing from $73,000 to $131,800. With improved medical care, the average life span of adults also is increasing; this translates into more years of care at increasingly higher rates. Without some sort of financial assistance, these costs could be financially devastating. In fact, your entire life savings could be quickly depleted within a few years of needing long-term care. This is where Medicaid can help.

Medicaid is a joint federal and state program to assist those with low income and limited resources. While Medicare provides limited long-term care coverage, Medicaid is much more extensive. However, because of its restrictions, qualifying for Medicaid can be extremely difficult. But paying for a nursing home without it could be all but impossible.

The Medicaid Maze

Although Medicaid requirements vary from state to state, they all share one common element: complexity. Each state specifies a maximum allowed income for individuals and couples in order to qualify for Medicaid. Also, the applicant´s total assets cannot exceed a specified amount, which is consistently very low, often less than $2,000². Although certain possessions, like your home and automobile, are "exempted," this figure is still alarming. If the applicant is married, the process becomes more complicated. For the recipient to qualify for Medicaid in any state, the applicant´s spouse can keep only half the couple's assets up to a maximum of $109,560. So, if a couple has $109,560³ in assets, they must "spend down" to all but $56,780 - $2,000 for the applicant and $54,780 for the spouse - on long-term care.

What can you do if the value of your "non-exempt" assets exceeds the $109,560 limit? If you give your extra assets away, which seems like an obvious choice, you will encounter greater problems. Violating this "Transfer Penalty Rule" could disqualify you from receiving Medicaid for months or years, depending on how much you gave away.

If your need for nursing home care is immediate, time is not something you can afford to lose.

Medicaid Qualification Process: Finding the Way

This is only a brief and oversimplified review of a few Medicaid rules, of which there are myriad more. Navigating them on your own could be a nightmare at best and subject you to penalties at worst.

Conclusion

Seek appropriate counsel before you apply for and seek to qualify for Medicaid. Through our referral network of Elder Law attorneys, we can help you -- and your family -- find peace of mind during a difficult and uncertain time. When dealing with Medicaid, legal advice is something you cannot afford to go without.

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¹ Note: As a service to our clients, we refer to several Elder Law attorneys admitted in Kansas and Missouri who have made Medicaid Crisis Planning a focus of their law practices.

² This Individual Resource Allowance is $2,000 in Kansas and $999.99 in Missouri.

³ This amount (the "Community Spouse Resource Allowance") is adjusted annually.

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Overland Park Estate Planning Attorney Kyle Krull assists clients in Kansas and Missouri with Estate Planning, Wills, Trusts, Revocable Living Trusts, Charitable Planning, Probate and Estate Administration, Asset Protection and Business Succession Planning in the greater Kansas City area including Overland Park, Leawood, Olathe, Lenexa, Johnson County Kansas and Jackson County Missouri.

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