I live in Atlanta and often walk places to avoid the traffic. It rains often in Atlanta, but I have a habit of doubting that it is not going to rain and I decide not to take my umbrella. The inevitable happens and the sky opens up causing me to get drenched. The same is true in Medicaid planning, as it is easy to put off thinking that the need for long term care will never arise. But, if it does and proper planning is not in place, it can create a crisis draining both the finances and energy of the family.
Nursing home Medicaid is a program funded by the Federal government and administered by the Georgia Department of Community Health to provide coverage of nursing homes and at home care costs for those who have a medical need for such care. Along with showing a medical need for care, applicants for nursing home Medicaid must satisfy assets and income tests. For the asset test, certain assets are excluded from counting, such as home equity up to a certain level, one automobile, and personal effects. For a single individual, they can only have $2,000 in countable assets and qualify for Medicaid, for a married individual the level is $121,220.
Those who wish to get on Medicaid and give away assets should be aware of the Medicaid penalty. Medicaid assesses a penalty of a certain number of months of waiting before Medicaid eligibility based on the value of the assets given away. Depending on the amount of the gift, the penalty can result in loss of Medicaid benefits for year. The key to planning for Medicaid coverage is that only gifts made within five years of the Medicaid application result in a penalty. Gifts made earlier than five years do not cause a penalty.
To ensure that Medicaid is available to pay for long term care, it is advisable to give away a significant percentage of assets well before the need for Medicaid arises. Assets can be given to a trusted friend or family member to hold in trust to ensure that Medicaid will be available. Medicaid planning is recommended even for those in good health with a comfortable amount of assets. This is because one fall can result in the need for long term care that can cost hundreds of thousands of dollars over a multiple year period.
As there are many issues to qualifying for Medicaid, those seeking to preplan are strongly advised to seek the advice of an experienced elder law attorney