Seniors need a strategy for paying for long-term care, should the need arise. In some instances, some individuals may have no option but to rely on Medicaid if they don't have enough income to purchase long-term care insurance, the assets to pay for care themselves or they cannot qualify for the insurance.
A recent article in The Victoria (TX) Advocate, titled “How does Medicaid factor into financial planning?”, recommends that the best plan to meet your long term care obligations is what it has always been: obtain a long-term care insurance policy if you can pay for it over the long term and are insurable. What if neither apply in your case?
Medicaid planning can be as a viable tool for long-term planning in the absence of any alternative. However, with the advent of new financial products and plans today’s baby boomer may find that there is a long-term care insurance policy that will work better and likely will have many more care options. After all, Medicaid "planning" is actually a misnomer as most seniors don’t plan to go on Medicaid, but rather experience an urgent care need, and there aren't any other options.
To qualify for Medicaid in Virginia, a senior must have less than $2,000 in countable assets with monthly income that is less than the cost of care. Even if a senior is considered well off when he or she retires, medical and long-term care costs can literally wipe them out financially which means Medicaid would become an option.
One potential pitfall of depending on Medicaid for long-term care is that federal law requires states to look for recovery of Medicaid benefits. The state will put in a claim against any assets that pass through probate upon the death of the recipient. This will include assets not counted during eligibility, such as the senior’s home that was listed for sale during their lifetime and therefore was not a ‘countable’ until their death.
Because estate and lifetime planning can be overwhelming and wrought with pitfalls, the article advises seniors to enlist the help of an estate planning attorney and, more particularly, an elder law attorney to evaluate all options available.
You can learn more about this topic as well as other strategies on our website under the tab entitled: elder law planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: The Victoria (TX) Advocate (February 13, 2015) “How does Medicaid factor into financial planning?”