Aging is an expensive proposition. And as we age, we discover that aging isn’t just about getting older. It’s about getting wiser, applying lessons learned in life, and leaving those we love with a well-documented plan that outlines our wishes to relieve them of undue burden.
Today’s senior population is largely the self-proclaimed hippies and partygoers of years gone by, making up a substantial portion of the world’s population. The Baby Boomers are converging on our healthcare system in dynamic numbers. The Boomers who coined the phrase “live fast and die young” are moving into old age. This makes an aging plan, and more specifically a financial plan, a priority for this generation as they move into their twilight years.
What is Medicaid Planning?
Medicaid Planning is any assistance provided to a potential Medicaid applicant prior to their need for benefits and in preparation for their Medicaid application. This process can be as simple as collecting documents and filling out an application. Or it can be as complicated as restructuring finances and creating non-countable assets. While some cases may be cut and dry, such as an individual who meets the eligibility criteria based on a low income, other situations can be quite complex.
Why is Medicaid Planning Necessary?
Even if you enjoy good health now, it is important to have an aging plan. An essential part of that plan is how to pay for the care you may need as you enter old age. The intent of Medicaid Planning is to ensure that you receive the care you require, which you may not be able to afford without an estate plan, including a financial plan.
Reasons for Medicaid Planning
Long term care is expensive
Medicaid eligibility is complicated
The application and review process is time-consuming
How Much Does Medicaid Planning Cost?
The cost of Medicaid Planning can range from free to $15,000 depending on the amount of income and assets an individual has and other factors such as marital status, home ownership, life insurance, and any veteran benefits they may be receiving. Be wary of an offer for free Medicaid Planning - even well-intentioned advice can end up costing more than you expected.
Is Medicaid Planning Legal?
Yes, Medicaid Planning is legal. There are some states that restrict who can assist and provide legal advice, but families in all states can engage in Medicaid Planning. It is a complex process and in Florida, it is best to consult with a knowledgeable Medicaid Planning attorney.
Does My Estate Have to Pay Medicaid Back?
There are certain situations that would require an estate to pay back Medicaid for benefits received. These are circumstances that can happen with or without your knowledge. Therefore, it is best to have good estate planning to avoid a potential lien on your estate.
Reasons Medicaid May Require Payback
Medicaid recipient sold home and went private pay before death
Medicaid recipient received an inheritance
All known assets were not disclosed by the Medicaid recipient
What is a Medicaid Crisis?
Far too often seniors and their adult children believe that Medicaid is a safety net for care later in life. A crisis occurs when the senior needs additional care and oversight but does not have the income or assets to cover the monthly cost – at home or in a senior living facility. For example, assisted living currently costs between $3,000 - $8,000 a month, an amount that far exceeds the income of most seniors living solely on social security benefits.
It is important to note, the Florida Statewide Medicaid Managed Care Long-Term Care Program does not cover all the costs of an assisted living facility. Depending on the program you choose, you will receive $800 - $1500 a month towards your care in assisted living. Your family will be required to come up with the balance due after income and Medicaid benefits are applied to the monthly facility fees.
Doesn’t Medicaid Pay When I Run Out of Money?
Medicaid isn’t a switch that you flip when you run out of money that instantly funds your bank account. Medicaid benefits require planning, an application, and lots and lots of patience. With a lengthy waitlist, Florida’s Medicaid programs are stretched and individuals on the waitlist are funded based on their score and frailty levels.
Can I Skip the Waitlist and Qualify for Medicaid at a Nursing Home?
It depends. To be admitted to a skilled nursing facility, you must have a qualifying event or condition. If you didn’t have a recent hospital stay and you do not require assistance with activities of daily living, medication management, or critical nutrition support, it is unlikely you will be admitted to a nursing home. While a minimum 60-day stay in a nursing home is an exception to the screening requirements of the waitlist, it is not an automatic solution to a Medicaid crisis situation.
What Happens if I Run Out of Money Before I Get Medicaid Benefits?
If you are living in assisted living when you run out of money, you may have to find a new place to live. Even if you have already applied for Medicaid and are just waiting for funding due to the waitlist. If your family doesn’t come up with the money to cover your fees each month, you will have to leave your assisted living home. There is no guarantee that you will have Medicaid funding at the same time as you deplete your assets.
I’m in Assisted Living and Running Out of Money – What Do I Do?
It is always a good idea to talk to the assisted living facility administrator before finances become a problem. They may help reduce your monthly expense, such as offering a smaller apartment or shared room. They may be willing to negotiate a lower monthly rate. It is important to address financial concerns head-on so your assisted living facility can offer resources and solutions that you are not aware of.
Choosing an assisted living facility based on the representation that they accept Medicaid is not a fail-proof plan. If you have $40,000 in the bank and a $2,000/month income, choosing a $5,000/month assisted living apartment in a facility that accepts Medicaid is still a risky decision. The $3,000/month difference in income and expense will deplete the $40,000 in the bank in less than a year. That will most likely be before Medicaid benefits are received. Even when you are funded, as previously mentioned, you are still required to pay the difference between what Medicaid pays and the balance due on your $5,000/month apartment.
How Do I Avoid a Medicaid Crisis?
An elder law attorney that is knowledgeable about Medicaid Planning is key to the success of your aging plan. A solid estate plan is the foundation of a thoughtful aging plan and exploring eligibility for public benefits is a process that is best handled by a professional. Most likely, you want to leave a legacy that relieves your family of the burden of paying for care. An elder law attorney is an ideal choice to help you design a plan that works for you.
Concerned about planning for future care? A family and estate lawyer that understands Medicaid for Florida residents is an invaluable member of your circle of concern. There are so many reasons why Elder Law Attorneys are a Resource We Love and you can read more about them in the Legal and Financial Section of our Blog.