Understanding Medicaid Planning: Tips for Seniors and Their Family Members

Posted on July 30, 2024 by shieldsandboris

Long-term care is extraordinarily costly. The Pennsylvania Health Care Association (PHCA) estimates that the average cost of a private room in a nursing home is nearly $115,000 per year. Seniors and families must proactively prepare for the risk of future long-term care needs. Even a very short period of long-term care needs can eat up a senior’s life savings.

Proactive Medicaid planning is the best solution. At The Elder Law Offices of Shields & Boris, we are committed to protecting your family’s legacy and its wealth. Long-term care planning is essential for seniors and their families. Within this article, our Pennsylvania elder law attorney provides Medicaid planning tips that you can use.

Why it Matters: Long-Term Care is Expensive, Generally Not Covered By Medicare

Long-term care encompasses a range of services and support for personal care needs over an extended period. It includes everything from a part-time home health aide to full-time nursing home care. As people age, the likelihood of needing long-term care increases significantly. However, the costs associated with these services are steep. They can often exceed the financial capabilities of families in Western Pennsylvania.

Medicare—the federal health insurance program for people aged 65 and older—only provides very limited coverage for long-term care. Indeed, the program primarily covers short-term stays in nursing facilities or limited amounts of home health care under specific conditions and only if such care is deemed medically necessary. Unfortunately, Medicare leaves a significant gap in coverage.

Here is the good news: Medicaid—another federal program that is administered by the states— steps in to fill this gap by offering coverage for long-term care. However, Medicaid coverage for long-term care is only available for senior citizens who meet strict financial eligibility criteria. In practice, this means that to qualify for Medicaid, some seniors in Pennsylvania are forced to “spend down” their assets before Medicaid provides support. Proper planning can protect your assets.

Five Medicaid Planning Tips for Seniors and their Members in Pennsylvania

Proper Medicaid planning can go a long way toward helping senior citizens and their families in Pennsylvania prepare for the future. Long-term care planning can be complicated, even overwhelming. The right approach takes a lot of the stress out of the process. Here are five Medicaid planning tips that you and your family can use:

Have the Conversation (Open Communication is Vital): As with other elder law and estate planning matters, open communication is essential. Discussing finances and future healthcare needs can be challenging, but doing so can make Medicaid planning a lot easier and a lot more effective. Notably, it is important for seniors to share their wishes and for family members to understand the financial realities of long-term care. These conversations can help prevent misunderstandings and ensure that everyone is on the same page regarding care preferences and financial arrangements.
Empower Trusted Decision Makers: Senior citizens who need long-term care services may or may not be able to handle their own medical, financial, and legal needs. Still, many people in this situation need additional support—either from a spouse, adult child, or other trusted loved one. As a general matter, senior citizens in Western Pennsylvania should designate trusted individuals, such as a family member or a close friend, to make decisions on their behalf through powers of attorney for health care and finances. Having trusted decision-makers helps in executing a well-coordinated Medicaid plan and ensures that the senior’s wishes are respected and followed.
Plan Ahead (More Options are Available): The sooner that you and your family develop a Medicaid plan, the more financial/legal options will be on the table to protect your assets from the potential cost. Here is the key legal regulation to understand: Planning ahead for Medicaid eligibility is vital because of the five-year look-back period imposed by Medicaid. Broadly explained, the rule reviews any asset transfers made within five years before a person has applied for Medicaid coverage. Any transactions made within the past five years could potentially be “unwind.” Early planning not only maximizes the options available but also minimizes the stress associated with urgent care needs.
Protect Assets With a Medicaid Compliant Trust: As explained by the Pennsylvania Department of Human Services, Medicaid has strict financial resource limits for seniors to qualify for long-term care coverage. One of the best strategies to protect assets from Medicaid is to transfer those assets into a Medicaid-compliant trust. Assets placed in such a trust are not counted as personal assets for Medicaid eligibility purposes. However, this is only the case if that trust meets legal standards. It should be set up at least five years before a person’s actual Medicaid long-term care needs.
Seek Professional Representation: Long-term care planning is not easy. Medicaid is a notoriously complex federal/state program. It is normal to have a ton of questions about eligibility requirements and Medicaid planning strategies. You do not have to answer these questions alone. An experienced Pennsylvania long-term care planning attorney can provide guidance on all applicable legal matters—from the creation of irrevocable trusts to the preparation of Medicaid application documents.

A key point that senior citizens and family members in Pennsylvania should keep in mind is that Medicaid planning is not one-size-fits-all. It is crucial that you and your loved one have a comprehensive estate plan in place that is well-suited for your specific situation. An experienced Pennsylvania elder lawyer can help you prepare a Medicaid plan that protects your assets and best achieves your objectives.

Get Help From an Elder Law Attorney in Western Pennsylvania

At The Elder Law Offices of Shields & Boris, our Pennsylvania elder lawyers are compassionate advocates for seniors and their families. If you have any questions about Medicaid planning, we are here as a legal resource. Get in touch with us by phone at (724) 204-6628 or contact us online to arrange your strictly confidential, no obligation initial consultation. Our firm is well-positioned to prove elder law services and estate planning services throughout Western Pennsylvania.

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