Planning for a Medicaid Crisis

3 Reasons Your Medicaid Plan Can’t Wait

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Medicaid planning probably isn’t something you have thought very much about. In fact, you may not even know what a Medicaid plan is. In reality, though, this is actually a very important part of your efforts to build a secure legacy for your loved ones. If you do not have a Medicaid plan, you are vulnerable and at risk of potentially losing the assets that you have worked so hard to acquire. Medicaid planning

Here are three big reasons why making a Medicaid is very important and is something that can’t wait.

1. There’s a very good chance you are going to need nursing home care

There is one very clear reason why you need to make a Medicaid plan. There is a high chance you are going to need nursing home care as the Genworth Cost of Care Survey reports that around 7 in 10 people will require long-term care at some period during the course of their life. The purpose of a Medicaid plan is to make sure that you can afford that care without having to spend down all of your assets.

The problem is, Medicare only pays for skilled nursing home care in very limited circumstances. This is the kind of care you’d need in situations like when you leave a hospital after surgery and require your bandages changed or when you have a stroke and are released into a rehabilitation facility. Most people don’t go into a nursing home for these reasons, though, and especially not for the long-term.

Instead, most people who go into a nursing home do so because they require custodial care. That type of care involves routine help with activities of daily living. If you get too old to bathe or dress yourself or make your food, then you would need custodial care. This is the type of care you’d also need if you have a condition like dementia where you are unable to live by yourself because of your waning mental health.

Neither Medicare nor private insurance will pay the bill in these situations, so unless you have long-term care insurance, you need a Medicaid plan to afford it. Medicaid pays for nursing home services when you require custodial care, but only if you qualify based on your demonstrated financial need. You either have to spend down your assets to do that, or you need to make a Medicaid plan to protect them so you can become eligible for Medicaid without giving up all you have worked for.

2. The cost of nursing home care is extremely high

There’s another reason why a Medicaid plan cannot wait. Nursing home and home care are extremely expensive. The cost of a semi-private room in a nursing home is $8,669 per month on average according to Genworth’s cost of care survey. If you want a private room instead, then you would be looking at an average cost of $9,733 per month. This adds up to around $116,796 per year just to be able to go into a nursing home and not have to share a room with someone else while you get the care that you need.

These are not amounts that most people can afford. If you try to start paying for these fees out of pocket, you are likely to see your money disappear very quickly — even if you are only doing it for a short period of time before you get benefits. If you want to be able to go into a nursing home without going broke as a result of the monthly bills, then you are going to need your Medicaid plan in place before the time comes when you need to be admitted. Paying for a nursing home even for a pretty short period of time is going to quickly drain your accounts and affect your ability to leave the desired legacy for your loved ones.

3. You need to act at least five years before you need care

Finally, it’s very important that you do not delay for too long in making your Medicaid plan. The rules for Medicaid eligibility establish a five-year look back period when you apply to try to get benefits. If you made asset transfers during the past five years in the time before you apply to get benefits, this is going to result in you becoming disqualified from eligibility for a period of time.

Making a Medicaid plan involves the type of asset transfers that can be disqualifying for you, so you want to make your plans at least five years before the time comes when it is likely that you will need nursing home care. Of course, no one can predict with certainty exactly when that time will be. Since you don’t know when something is going to happen that forces you to go into a nursing home, it is best to make your plans well before that could become a possibility.

You should make sure to reach out to a skilled and experienced Medicaid planning lawyer so you can make plans sooner rather than later. McGee Law, a Texas estate planning and elder law Firm, will provide the help and support that you need to put your plans in place. You can give the firm a call at 817-899-3286 or contact us online today to schedule a consultation and learn how we can help you to be prepared in case the day comes when nursing home care becomes essential for you.

Brandon McGee
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