Have you heard information about Medicaid for nursing home costs from a friend, relative, or neighbor? If so, chances are you’ve also heard one of the Medicaid myths that aren’t true. Here are 4 common misconceptions about qualifying for Medicaid to pay for your Long-term Nursing Home care costs.
Myth #1: Medicare will pay for my long-term nursing home care
Many retirees believe that they are covered for long term care because they think the Medicare Health Insurance program will cover their nursing home costs if they ever need long term care. This is simply not true. Medicare doesn’t pay for long-term care. In order for Medicare to pay for any portion of your Nursing Home stay, you must spend at least 3 days in a hospital for an injury or illness, and then on the 4th day or later be discharged from an acute waitlist bed to a nursing home for the purpose of rehabilitation. Medicare can only pay for a maximum of 100 days of nursing home care per incident, but on average only pays for about 25 days. Once you plateau and stop showing signs of improvement in your rehabilitation process, Medicare will cut you off and will not continue to pay for your care on a long-term basis.
Myth #2: Medicaid will send me to a poor quality nursing home
I’ve heard many clients express the concern that they don’t want Medicaid because they’re afraid Medicaid will send them to a nursing home that doesn’t provide good care or that they will receive poorer care in the facility if they are a Medicaid patient. This is just not true. Medicaid doesn’t pick which nursing home you go to. You choose where you want to go and where there is availability. Almost all major nursing homes accept Medicaid. There are also many private care homes called foster homes which qualify to accept Medicaid. There are, however, some private care homes called Adult Residential Care Homes (ARCH) which generally don’t accept Medicaid.
Myth #3: I must use up all of my assets on my care before qualifying for Medicaid
Because Medicaid requires a Medicaid recipient to have less than $2,000 in countable assets, most people believe that you must spend all of your money on your nursing home care and other medical expenses before you can qualify. This is simply not true. You may spend money on purchasing anything you want and need for yourself. In addition, there are legal ways to transfer your assets to your family members or friends, preserve a large portion or all of your assets for them, and still qualify for Medicaid. In almost every case we can help clients to preserve at least half of their assets and still qualify for Medicaid—even if they didn’t plan ahead to give away assets. In the case of married clients where one spouse is healthy living at home we have been able to preserve ALL of their life savings for the benefit of the healthy spouse using our techniques and still legally qualify the other one for Medicaid.
Myth #4: If I give away assets I have to wait 5 years before qualifying for Medicaid
This is probably the biggest Medicaid myth there is. Many people have heard that there is a 5 year penalty before they can qualify for Medicaid if they give away their assets. The truth is that in most cases, the penalty is shorter than 5 years and in some cases, it can even be LONGER than 5 years! When you apply for Medicaid, they ask you to report what assets you’ve given away in the previous 5 years. Depending on the value of everything you’ve given away in the 5-year lookback period, you will have a penalty period assessed to you. As of 2016, for every $8,850 in assets you’ve given away during the 5 years prior to applying for Medicaid, you will have a one-month penalty period to wait before you can qualify for Medicaid. For example, if you have given away $88,500 total in the previous 5 years, you will have a 10 month penalty when you apply for Medicaid. This penalty starts when you’re in the nursing home and meet all the other requirements to qualify for Medicaid. However, there are legal exceptions that allow us to reduce or completely eliminate the penalty period under federal law. This means that these techniques should work in every state, and the State of Hawaii doesn’t have the authority to change the law to eliminate these exceptions.
If you or someone you know is in a nursing home privately paying for care, or is about to be in that situation, please have them come see a Medicaid specialist at Okura & Associates to learn what options are available to preserve some or all of their assets for their loved ones—even at the last minute and especially if someone has told you that you must spend down your assets before qualifying for Medicaid.