To understand the distinction between Long-term care Medicaid and Health Insurance Medicaid, let’s start at the beginning. Medicaid was created in 1965 as part of Lyndon B. Johnson’s War on Poverty. The program was designed to address healthcare issues for seniors in need, pregnant women, low-income individuals and people with disabilities.
Health Insurance Medicaid continues today as the public health insurance program for those with low income. At Stouffer Legal, we do not assist clients in obtaining these types of services. To qualify for this type of Medicaid, the applicant must have a very low income and few assets. Most applicants do not have access to any other type of health care and therefore use the Medicaid system to provide these services.
Our firm deals more with clients who may at some point need to apply for Long-Term Care Medicaid. The income requirement for this type of Medicaid is that the applicant’s income is lower than the cost of the reasonable care. Medicaid may step in to cover the balance between what the patient can pay and what the nursing home facility is charging.
In order to qualify, it does take some proactive planning. First, note that Medicare is different from Medicaid. Medicare does not pay for long-term care. Long-term care costs are skyrocketing all over the country, and more so in Maryland than in many other states. It is not unheard of to pay $15,000+ per month for nursing home care. This can quickly deplete the savings of many individuals and couples.
The planning component comes into play by reallocating assets in such a way that they are not “countable” by Medicaid. There are many ethical and legal ways to shelter assets for this purpose. There is a five-year lookback so any assets transferred out of the potential applicant’s estate will be counted if the transfer took place within five years of the application date. For this reason, this planning process should occur well before someone needs nursing home care if possible.
The planning process differs between individuals and couples. Couples need more complex strategies to protect the assets for the healthy spouse who may choose to continue residing in the marital home when the other spouse moves into a nursing home. The Maximum Community Spouse Resource Allowance for 2022 allows the spouse staying in the home to have assets worth an additional $137,400.
With proper planning, the spouse can be protected financially and some of the hard-earned assets may still be available to pass down to the next generation. This type of planning is available for clients in a wide range of net worth. The majority of clients taking advantage of these types of planning services are middle-class to upper-middle class.
One other point to address about long-term Medicaid is that when your loved one is in a nursing home and qualifies for assistance from Medicaid, he or she will receive the same treatment as those using private pay methods. It is against the law for the staff at a facility to discriminate against Medicaid patients. Often the staff is not even aware of how patients pay for their care.
For more information on long-term care planning that helps prevent using up all of your hard-earned assets to pay nursing home care, contact the experienced attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
