Why is Medicaid/Medical Assistance Planning important? As we age, we may reach a point where it becomes difficult to care for ourselves. If so, it may be necessary to consider a nursing home. Affording a nursing home can be difficult. Unfortunately, many elderly people may need to become a resident of one temporarily or even permanently. Without proper planning, nursing home care can cut into one’s savings, retirement funds and loved ones’ inheritances. Pennsylvania residents might be under the impression that they can finance nursing home care through Medicaid, which may be true but is often complicated.
Medicaid is a program funded jointly by state and federal governments that covers medical bills for senior citizens and disabled persons, depending on their medical needs, income and assets. While it is true that anyone can apply for Medicaid, it is important to know that there are strict requirements for eligibility. Spend down, the process of spending one’s assets to help qualify for Medicaid, was discussed previously on this blog. Another matter to keep in mind is the look-back period referenced in the Deficit Reduction Act of 2005.
When looking at one’s assets to determine if he or she can qualify for Medicaid, the Act changed the look back period from three years to five years. This means that one needs to have bank statements, financial records and tax returns going back for the past five years to prove that one does not have too many assets to qualify for Medicaid or has not transferred assets to loved ones over the five years before trying to qualify.
There are different ways to do Medicaid/Medical Assistance Planning to help qualify for Medicaid, such as relinquishing control of one’s assets by placing them in an irrevocable trust five years before applying for eligibility. However, this, and any other steps taken to plan for Medicaid eligibility must be taken in a timely manner and must be carefully understood by everyone involved. It can be beneficial to consult an experienced elder law attorney for guidance on how to proceed.