Two professors of health-care policy (one at Harvard Medical School, the other at Brown) and a professor of economics at MIT recently co-wrote an opinion article in the New York Times that answers the question: do I need Medicaid?
Their answer: eventually, you probably will.
Too many people think that Medicaid is only for the very poor, and those on Medicaid are sometime viewed with an unfavorable stigma. The fact is, the older we get, the more likely it is that we will need long-term care. That process usually begins when hiring a home-health aid becomes helpful. From there you, or your elderly loved one, will likely move into an assisted living facility. Eventually, when near 24/7 care is needed, a skilled nursing facility / nursing home may become the only practical option. The NYT article quotes a sobering statistic:
“1-in-3 Americans turning 65 will, at some point, require nursing-home care at some point during his or her life.”
Some people will require skilled nursing care suddenly - such as after a serious car crash or after suffering stroke or serious heart attack. Others may find skilled nursing home care needed after gradually needing assistance with multiple activities of daily living or with the progression of typically age-related conditions such as dementia, Alzheimer's or Parkinson's.
Why You’re Probably Going to Need Medicaid
In short: long-term care is really expensive. What most people don’t realize is that, in Florida (as of 2019), the average price of a skilled nursing facility is $9,171.00 per MONTH! That’s $110,052.00 per year.
There are really only five ways to pay for long-term care: cash, long-term care insurance, VA benefits,Medicare and Medicaid. Click the link above to read about these in more detail, but briefly: most people do not have long-term care insurance (when they realize they need LTC insurance, it’s often too late or too expensive to obtain). Similarly, most Floridians do not have millions in the bank to afford to payout six figures per year. The VA benefit is only for veterans and their spouses and is limited to roughly $2,200 per month (really good for home health or ALF care, but not enough to pay for nursing home care).
Many people erroneously believe that Medicare will pay the bill. Medicare, in fact, has a very limited long-term care benefit. Essentially, after 100 days of nursing home care, regardless of how good of a Medicare supplement you have, Medicare stops paying. Even when Medicare does pay - it only pays in full for 20 days.
That leaves Medicaid.
Should You Speak to a Medicaid Lawyer or Elder Law Attorney Now?
Elder care attorneys or Medicaid lawyers essentially engage in asset-protection for the middle class. My clients are usually between the ages of 65 and 90, own their own home and have between $50,000 and $750,000 in assets on top (between bank accounts, brokerage accounts, second homes, retirement plans, etc…).
As a Medicaid-planning attorney, I am able to legally and ethically protect my client’s assets in a way that makes them qualified for Medicaid. So, the government picks up the bulk of your long-term care costs and you get to use your assets to supplement your lifestyle (Medicaid pays for a lot, but not everything). Medicaid planning also makes it much more likely that you’ll have something to pass onto your heirs.
The longer the time horizon we have to plan, generally speaking, the more options I am able to provide. Too many people come to me in crisis (i.e. needing long-term care now as opposed to planning for the future). In these crisis-planning cases, I am generally able to shelter roughly 65-80%of my client’s assets vs. 100% if we have 5 years to plan. Speaking of five years...
Do I have to wait five years to get Medicaid?
No. This is probably the most common misconception in the world of Medicaid planning / Elder law: what is the Medicaid five-year rule? I can qualify almost anyone for Medicaid. Theoretically, if you came into my office today, and were able to implement my Medicaid plan the same day, I could have you qualified for Medicaid tomorrow. Realistically, with all the moving parts, it takes a week or two to get everything done.
My clients get into trouble when they gift money away in an attempt to qualify for Medicaid. The reason why “five years” or “60 months” is important for Medicaid-purposes is that Medicaid, by Federal law, must look-back five-years to see if any of their applicants have given away assets. If you have, you will be subject to a penalty. Click the link above to read more about the Medicaid 5-year look back period. These pitfalls are why you want to consult with a Medicaid attorney or Elder care lawyer before doing anything.
In short - you do NOT have to wait five years to engage in Medicaid planning. The strategies I am able to offer avoid implicating the five-year-look-back rule.
What do you charge for an Elder Law / Medicaid Planning Consultation?
I charge $350.00 for an elder law consultation. But, if I am hired, I apply that to the final balance.
Before the consultation, I ask my potential clients (or their adult children) to fill out a one page worksheet, this makes the consultation much more productive. During the consultation, I essentially explain how Medicaid planning works and provide my potential elder law client with a menu of options, along with a “pros and cons” analysis of each. Typically we’re utilizing a combination of Medicaid-planning strategies, as there are many ways to do Medicaid planning and every client has their unique preferences and goals.
I’m also making sure that the basic estate planning and incapacity documents are in place (will, revocable trust, power of attorney, health care surrogate designation, etc…) as they are very important and can impact Medicaid planning. So if you're just looking for basic or essential estate-planning documents, I can assist with those as well.
Once we develop a Medicaid asset protection strategy that fits with my client’s needs, and I am hired, it generally takes between 1 and 3 weeks to get everything prepared (depending on the complexity of the Medicaid planning tools being used).
Everything I do is flat fee. After the consultation, you will know the precise legal fee. I don’t charge my client’s by the hour because I want them to call or email if they have questions throughout the process (without fearing that they’re going to get a legal bill).
I hope this has helped explain what a Medicaid lawyer does and why it might make sense for you to schedule a consultation to protect your assets, or the assets of a loved one, from the threat of long-term care expenses.