When a loved one needs care at home, in Assisted Living, or in a nursing home, figuring out what to do and how to get help can be overwhelming. Here we answer a few questions we hear often when it comes to eligibility for certain long-term care benefits.
1. Who can get help from Medicaid or the VA?
Of course, planning ahead is best, but if a crisis arises and you didn’t quite get around to planning, it’s not too late to make smart decisions and to benefit from a good, last-minute plan.
EVERYONE can qualify for help! No one has too much or too little to benefit from Medicaid and/or VA benefits as long as they meet the standards for eligibility.
2. What are the Medicaid and VA Eligibility Standards?
Both benefits are income and resource (or, asset) based benefits.
Medicaid applicants need to be both income and financially eligible, and in need of services Medicaid can provide (like home care, Assisted Living, or Nursing Home services). If you’re in Assisted Living or a Nursing Home, the facility must also accept Medicaid in payment for care.
VA applicants need to have served during a declared War or Conflict, Honorably Discharged, and have recurring unreimbursed monthly medical expenses. T
3. Is it true I have to “spend down” all my assets?
Both Medicaid and the VA have limits for the dollar amount of resources you can own and still qualify for the benefits. But, depending on your marital status, some assets may not be counted (at least initially). There are opportunities to advantageously reposition those assets that are in excess of the resource limits they each impose.
In other words, it is NOT necessary to spend everything to get to eligibility with a carefully crafted plan. Assets and income can be preserved for needs that Medicaid or VA may not cover, for your spouse, or for your family after the Medicaid recipient passes away.
4. What is a “look back period”?
Both Medicaid and VA will require you to disclose information for review so they can determine if you qualify for benefits. Medicaid will review information for 5 years prior to the date of application and VA will review 3 years prior to the date of application. They will both be looking for money transferred out of the applicant’s name in order to qualify for benefits. These transfers could occur to family members, trusts, or any other person or entity. Both Medicaid and the VA will impose a penalty based on those transfers it deems “improper,” which is basically anything transferred as a gift or as an exchange for less than fair market value.
5. What if I’ve already given away money or assets?
A good advisor will consider past transfers and incorporate them into a plan.
6. How will I be penalized?
Both Medicaid and the VA will decline to pay for care for a period of time based on the value of the assets transferred during the “look back period.” The maximum penalty (or the length of time you will not receive the benefit) is 5 years for both. However, a solid plan will ensure that your care will be paid for if a penalty is imposed, all while ensuring eligibility as soon as possible.
7. What is Estate Recovery?
Estate Recovery applies only to Medicaid. The State of Ohio will seek to recover the funds spent on the care of a Medicaid-recipient from his or her estate after death or from the estate of the spouse, even if the spouse didn’t need Medicaid-paid care. A thorough plan will consider Estate Recovery and will address how to avoid it. Your Medicaid Eligibility Plan should not be good only for the lifetime of the applicant — it should continue to protect the estate for the applicant’s spouse or family, even after the death of the Medicaid Recipient.
Consulting with a Certified Elder Law Attorney (CELA) can help prevent costly errors and preserve assets for a parent, spouse and heirs. And as importantly, an effective Elder Law plan provides peace of mind your loved one is getting the best possible care.
To talk with a Certified Elder Law Attorney about how to plan for long-term care benefits, whether you are planning ahead or find yourself or your loved in a crisis situation, all you have to do is reach out. It’s never too late. Let’s Talk!