- Thinking it’s too late to plan.
There is a lot of information about Medicaid for long term care of the elderly – rules, eligibility, etc. available to the public, (FAQs from Colorado Dept. Health Care Policy & Financing ) and many people suffer from information overload in this regard. Sometimes this results in reacting to a situation without a plan, which can add to the stress of uncertainty. People considering future Medicaid application are often in a downward health spiral that creates stress and anxiety for family members who are helping and providing for care. This is a difficult mix! Before you jump to conclusions about whether it’s too late or too early to start planning for Medicaid qualification – inform yourself. It’s never too late to have a strategy – especially if you want to manage stress effectively during difficult times or the end stages of an elder loved one’s life.
2. Giving away assets too soon.
Many of us hear from people who want to “avoid paying the nursing homes” for what is perceived to be overpriced health care. The fact is, most long term care for elders is provided by family members on an unpaid basis. Fewer people (as a percentage of the elder population) are living in nursing homes (or SNFs – short for skilled nursing facilities) but there is a point when the medical care needed to sustain a person may require placement at a SNF. Placement in a SNF may be a cheaper alternative to home care for many frail elders and is often a necessity. Medicaid is the national health care program for poor and low income Americans and is the safety net for long term care and Medicare covers less than 9% of SNF care.
3. Ignoring important safe harbors created by Congress.
This is some of the Medicaid fine print! Certain transfers are allowable without jeopardizing Medicaid eligibility. These include: transfers to disabled children, caretaker children, certain siblings and to a trust: for a disabled person under age 65; a transfer to a “pay-back” trust if under age 65; and a transfer to a pooled disability trust at any age.
4. Failing to take advantage of protections for the spouse of a nursing home resident.
Several protections are afforded the noninstitutionalized “community spouse.” These protections include the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance, and in some instances petitioning for an increased income allowance or refusing to cooperate with the nursing home spouse’s Medicaid application.
5. Applying for Medicaid too early or too late.
Doing either of these can result in a longer period of ineligibility in some instances, so it is important to try for “the golden mean” in terms of timing.
7. Confusing IRS tax rules with Medicaid rules.
The rules regarding income, estate and gift taxes are completely separate from Medicaid. While it is important to be mindful of the tax consequences of any type of asset planning, confusing these two different systems can lead to disaster.
8. Not getting expert help.
This is a complicated field that most people deal with only once in their lives. There is lots of money at stake, and the information can be overwhelming. For many people, it makes sense from a peace of mind investment perspective to consult with persons who make their living guiding and counseling people about these issues.
©Barbara Cashman, LLC www.DenverElderLaw.org