Elder Law & Medicaid FAQs

Medicaid planning uses legal tools and strategies to protect your assets and help ensure your eligibility for benefits in the event you need them in the future. For example, you might establish a Medicaid trust, which is an irrevocable living trust into which you would transfer non-exempt assets. When Medicaid planning is incorporated into an estate plan early on, it drastically increases the odds of qualifying for benefits while decreasing the likelihood of losing valuable assets in the process.

Given the Medicaid spend-down requirements, you may be concerned that a community spouse will be left with no resources if you need to qualify for Medicaid. Fortunately, that is not the case thanks to the Medicaid spousal impoverishment rules. The spousal impoverishment rules allow a community spouse to keep some income and assets when the other spouse goes into long-term care.

If your assets exceed the countable resources limit when you apply, you may be required to “spend-down” your assets. Basically, this means you will be expected to rely on your non-exempt assets to cover your LTC costs. When your assets drop below the $2,000 limit, Medicaid will start helping with your LTC expenses.

If the value of your non-exempt assets exceeds the resource limit when you initially apply for Medicaid, your application will be denied. Transferring assets in contemplation of applying for Medicaid won’t work because Medicaid uses a five-year “look-back” period. The look-back rule allows Medicaid to review your finances for the five-year period prior to application for any asset transfers made for less than fair market value. If any are located, Medicaid may impose a waiting period based on the value of the asset transferred. The way to avoid finding yourself in this situation is to incorporate Medicaid planning into your estate plan long before you are likely to need to qualify for Medicaid.

Some assets, such as a primary residence up to a certain equity limit, are exempt; however, it is very easy to exceed the asset limit if you failed to plan ahead. Each state decides what assets are exempt. Common examples of exempt assets include:

• Your primary residence up to an equity cap
• Household goods and furnishings
• One vehicle
• Term life insurance
• Burial plot

Your eligibility for Medicaid is determined, in part, by the income and asset limits imposed by the program. The income limits are tied to the Federal Poverty Level, or FPL. The FPL, in turn, changes each year and is determined by your household size and geographic area. The “countable resources” limit refers to the value of your non-exempt assets. In many states the countable resources threshold is only $2,000 for an individual.

As you age, your odds of eventually needing long-term care (LTC) increase dramatically. At retirement age (age 65), you already stand a 50 percent chance and by age 85 those odds will have increased to a 75 percent chance. As of 2018, the average yearly cost of LTC in New Hampshire was over $133,000. With an average length of stay of three years, you could be facing a LTC bill of well over $400,000. Making matters worse is the fact that neither Medicare nor your basic health insurance coverage will likely cover LTC expenses, leaving you to pay out of pocket unless you are eligible for Medicaid.

People often confuse Medicaid and Medicare and/or use the two names interchangeably. Although both offer healthcare benefits, they are two very different programs. Like Medicaid, Medicare is funded by the U.S. government but is also administered by the federal government. Medicare is an entitlement program, meaning that as long as you paid into the program during your working years, you are automatically entitled to benefits when you turn 65. Medicaid, on the other hand, is a “needs based” program, meaning you must demonstrate a financial need for the benefits offered by the program.

Medicaid is a healthcare program that is predominantly funded by the United States federal government; however, the individual states have the option to supplement funding and expand on the coverage mandated by the federal government. Medicaid is also administered by the individual states, meaning the eligibility guidelines and benefits offered will differ somewhat from one state to another. Basic Medicaid typically covers things such as:

• Doctor visits

• PrescriptionsHospital stays

• Emergency care

• Preventative care

The reason Medicaid may become important to you as you age is that Medicaid for seniors will also cover LTC expenses as well as community-based programs that are aimed at allowing seniors to remain in their homes longer instead of going into a LTC facility.

The harsh reality is that abuse of the elderly is a very real problem in the United States. Although accurate figures are hard to come by, experts believe that at least one in ten seniors will be the victim of elder abuse. Sadly, they also tell us that about 75 percent of the time it is a family member who is the perpetrator that abuse. Moreover, 40 percent of nursing home residents have reported abuse, and more than 90 percent report that they or another resident of the facility have been neglected. While elder abuse can be a criminal offense in most states, it can also form the basis of a civil lawsuit against the perpetrator and/or the facility that allowed the abuse to occur. If you suspect that an elderly loved one is the victim of abuse, an elder law attorney can discuss your legal options and help you remove your loved one from the abusive environme

Neither Medicare nor most basic health insurance plans will cover the costs associated with long-term care. Unless you have the resources to cover the high cost of nursing home care out of pocket and indefinitely, you will likely find yourself turning to Medicaid for help. To be eligible, however, you must contend with very low “countable resources” limits that can put your retirement nest egg at risk. An elder law attorney can help you incorporate Medicaid planning into your overall estate plan to make sure you are eligible for benefits if you need them while still protecting your retirement nest egg.

The caregiver statistics are truly eye-opening. A 2015 survey conducted by the National Alliance for Caregiving and AARP indicates that approximately 43.5 million caregivers provided unpaid care to an adult or child that year. The average dollar amount in lost income and benefits over a caregiver's lifetime is estimated to exceed $300,000. Moreover, if you are a caregiver you likely deal with emotional stress, financial hardship, and legal struggles that are directly related to the care you provide. You need, and deserve, help. Fortunately, help may be available but you must know where to look and how to obtain that assistance. That’s where an experienced elder law attorney can help with things such as getting your loved one approved for Medicaid benefits that may even pay you to care for your loved one or helping you to obtain guardianship which gives you much needed legal authority.

For an adult child, few things are more painful than watching a parent deteriorate physically and/or mentally. Making the decision to seek guardianship over a parent is a heart-wrenching decision; failing to do so could lead to serious injury and/or victimization by those who prey on the elderly. An elder law attorney can help you petition for guardianship to ensure that you have the legal authority required by law to properly care for and protect your parent.

Anytime a legal issue involves a senior, or caregivers of the elderly, an elder law attorney may be able to help. By way of illustration, however, the following are examples of scenarios in which you might seek the assistance of an elder law attorney:

• You received a denial for SSI, SSDI, or other benefits
• You need to petition for, or object to, a guardianship
• You have faced housing discrimination
• You are concerned about long-term care planning
• You need to create or update an estate plan
• You (or a loved one) are the victim of elder abuse
• You wish to prepare an advance directive
• You are concerned about retirement planning
• You have a loved one who you believe is the victim of nursing home abuse
• You need information about veteran’s benefits

The National Academy of Elder Law Attorneys, or NAELA, was formed in the late 1980s as a way to better serve this growing segment of the population. Five years after the creation of NAELA, the National Elder Law Foundation was formed. The purpose of the non-profit NELF was to help improve the professional skills of attorneys who choose to focus on elder law. Toward that end, NELF then developed a national certification program for attorneys known as the Certified Elder Law Attorney, or CELA, certification program. Attorneys who wish to gain certification in the area of elder law may do so through a rigorous and selective certification program recognized by the American Bar Association and administered by NELF.

The population of older Americans has increased dramatically over the last several decades, causing people to realize that the unique legal issues they faced were not being addressed. To remedy that problem, a new area of the law known as “elder law” began to evolve. One thing that makes elder law different than other specialized areas of the law is that unlike those areas, and elder law attorney does not focus on a single type of law as does a criminal or personal injury attorney. Instead, and elder law attorney focuses on how the various legal issues impact a specific population – the elderly and those who are for them.