When an elderly loved one requires long-term care, many tough decision need to made. Having Medicaid pay for long-term care can be tricky and there are many pitfalls one needs to be aware of. Having worked with seniors and their families for many years as a Medicaid consultant at Senior Planning Services, here are some common do’s and don’ts you need to be aware of.
1. Do. Set up an irrevocable trust fund for funeral and burial plots.
For Medicaid purposes, there’s what is referred to as ‘spend-down’. This means that in order to qualify for long-term care, the beneficiary needs to meet the state resource criteria. Some assets are ‘counted’ while others are ‘excluded’. Setting up an irrevocable fund for funeral or burial plot expenses can be a smart way to ‘spend down’ ones assets. Medicaid will cover for a basic funeral service and many applicants opt for a higher standard which will not be covered but will count toward the ‘spend-down’.
2. Do. Try to get in home care covered by Medicaid.
If your loved one requires long-term in-home care and is being cared for by a family member, there are some scenarios where said family member can get reimbursed by Medicaid. Check with your states Medicaid program regarding the various support programs for caregivers. For more info on the services your state offers for seniors and their families, visit: www.eldercare.gov
3. Don’t. Accept cash in exchange for providing care for a loved one.
This will be viewed as a gift. While gifting is beneficial for estate tax purposes, it does not help in terms of qualifying for Medicaid. Medicaid conducts a five-year ‘look-back’, and will impose a penalty on any gifts granted during this time. The corresponding amount will be deducted from Medicaid coverage. What you can do is have a legitimate detailed caregiver contract written up with the help of a qualified professional.
4. Do. Plan for long-term care.
Unless it is specifically requested, many estate attorneys do not take Long Term Care planning into consideration. The world has changed over the last 100 years, with the life expectancy in North America going from 47 to 82 years of age, and estate planning needs to reflect those changes. 70% of individuals 65+ will live for some time in a long-term care facility, according to an AARP study.
5. Do. Make sure you fill out that Medicaid application with utmost care, and supply all the requested documentation in a timely fashion.
Failure to submit documentation by the requested deadlines will result in a denial, bringing you back to square one. Because Medicaid will only pay retroactively from the date of the application, a denial as result of missing documentation will leave you with an astronomical bill to foot for the ‘pending period’. It is imperative that the application get done right the first time around.
Caring for a loved one can be physically tiring, emotionally taxing, and financially overwhelming. That said, there is help to be had. All it takes is a bit of planning and contacting the right resources so that the right decisions can be reached.