In working families who have a loved one receiving Long-Term Care, I've run into several Medicaid Myths. Here are a few myths with clarifications:
Myth #1 - Medicaid is only for “broke people.”
Reality - Medicaid does have income and property guidelines. However, most, especially couples, are NOT too rich for Medicaid when one spouse needs long-term care.
Myth #2 - You have to “spend-down” all your assets to qualify for Medicaid.
Reality - Not exactly. Federal Law gives couples special treatment to reposition assets.
Myth #3 - There is a five-year look-back that won’t allow for any movement of money.
Reality - Yes, there is a five-year look-back/ review for any assets that were given away or sold for less that full value. There are some exceptions to this rule involving gifts for disabled children (of any age) and children that have been providing care for their parents. Also, federal law allows for re-positioning of assets between couples, and limited gifting might make sense in some cases.
Myth #4 - Medicaid will take my house.
Reality - Medicaid is not coming to kick you out of your house. The Medicaid Estate Recovery provision DOES allow Medicaid to put an lien against your home, upon the passing of the couple, to help recover what they have spent on your behalf. During your life-time, you get to live in your home, just like you always have.
Note: Because Medicaid has rules for every situation, including both state and federal laws, a couple with over $25,000 may do well to consult with an Elder Law Attorney or Medicaid Planner to fully utilize these provisions.
Example:
Debra is 51 years old, healthy and working. George is 64 and needs Memory Care Assisted Living. His condition is non-curable and is worsening. George and Debra have a 13-year old daughter, Caylee. Based on George’s physical health and age, it is possible that George could need care for another 20 years. Current cost for George in the Memory Care Assisted Living is about $6,000/month.
Thankfully, they have their home paid for, free and clear. They also have bank accounts and investments of about $270,000. Of course, they need to be able to manage expenses in the community for Debra and Caylee. Eventually, there will be college costs, home repairs, maintenance and replacement of vehicles, etc. How much should Debra get to keep? How much should the couple have to “spend-down” before they qualify for Medicaid for George?
Unfortunately, the answer would change, based on the state in which they live, and whom you might ask. With a qualified Medicaid Planner helping to comply with the federal provisions, the couple could keep virtually all of their assets for Debra and Caylee to live in the community, and George could qualify for Medicaid to help cover the Memory Care costs.
