You have likely heard of the Medicaid program but you might not be as familiar with its eligibility guidelines. After all, if you have never needed to qualify for Medicaid benefits, why would you? Many people go their entire working years without ever worrying about their ability to qualify for Medicaid benefits. However, be warned. Applying for medicaid as a senior is all too common if you need long-term care.
Unfortunately, people often fail to plan ahead for the possibility that they will need to qualify for Medicaid benefits. This mistake that can put your hard-earned assets at risk. If you are approaching your “Golden Years,” or are already enjoying them, you need to know how applying for Medicaid as a senior works and why you should already be planning for the possibility that you will need to qualify for Medicaid benefits.
Will You Need Long-Term Care?
You may not wish to dwell on the possibility; however, the reality is that the longer you live the better the odds are that you will eventually need long-term care. The same applies to your spouse. Consider these statistics:
- At age 65 you stand about a 50-50 chance of eventually spending time in a long-term care facility.
- At age 85 those odds jump to a 75 percent chance with an average length of stay of 2.5 years.
If you are married, keep in mind that your spouse will be facing the same odds as you. So, whether it’s you, your spouse, or both of you, in all likliehood you will pay for long-term care at some point during your retirement years.
What Will Long-Term Care Cost You?
Nationwide, the average cost of a year stay in a long-term care facility runs just over $80,000 as of 2016. Residents of the State of Texas are a little more fortunate. The average cost for a year stay in a semi-private room in a long-term care facility in Texas is less than the national average. Still the state average of $51,000 a year is nothing to scoff at. Not to mention a private room averages around $68,000 as of 2015.Consequently, an average stay in a long-term care facility in Texas will still likely cost you between $150,000 and $200,000 on average.
What about Your Health Insurance Policy and/or Medicare?
Although people often fail to realize it, most private health insurance policies do not cover long-term care costs unless you purchased a separate long-term care rider at a considerable additional cost.
What about Medicare? Unfortunately, Medicare only covers long-term care costs in very specific circumstances and for only relatively short periods of time. Medicaid, on the other hand, will cover the costs associated with long-term care. The “catch” is that you must first qualify for the benefits.
Medicaid Eligibility Guidelines
Medicaid is intended to provide healthcare coverage for lower income individuals and families. For this reason, the Medicaid program has both an income and an asset limit. As a retiree, your monthly income may not be an issue; however, your assets likely will. In Texas, you cannot have countable assets valued at more than $2,000 to qualify for Medicaid. If your assets exceed the limit you will essentially have to deplete them before being eligible for Medicaid benefits.
Worse still, the Medicaid eligibility guidelines employ the five-year look back period. This effectively prohibits you from transferring assets out of your estate in an effort to reduce the value of your estate anytime in the five year period leading up to your application for benefits. Imagine spending you entre life working hard and saving money just to see it all disappear. This could happen if you are faced with a huge long-term care bill that isn’t covered by any insurance program!
However, there might be a solution for you! Medicaid planning can be light at the end of the tunnel for those looking to protect their assets. Medicaid planning incorporates legal tools and strategies into your estate plan that are aimed at protecting your hard-earned money while also ensuring that you will be in a position to qualify for Medicaid benefits if you do need them in the future.
If you have additional questions or concerns about applying for Medicaid or incorporating Medicaid planning into your estate plan, contact the experienced Texas estate planning attorneys at The Mendel Law Firm, L.P. by calling 281-759-3213 to schedule your appointment today.