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No, Medicaid Is Not the Only Way You Can Afford Long-Term Care


It is scary to think about old age and death, but it is even scarier to think about the financial future that most American consumers, including many with salaried jobs, can face.  You might despair of ever saving enough money for retirement to sustain you through 20 or 30 years of retired life, especially if you require long-term care at some point in your golden years.  The good news is that Medicaid will pay for long-term care for people who cannot otherwise afford it, but the bad news is that many states are reducing their Medicaid budgets; fortunately, Maryland is safe for now.  In other words, it is not so easy to qualify for Medicaid, and you do not exactly get a constant supply of freebies if you do qualify.  If the phrase “annual gift tax exclusion” is in your vocabulary, you probably have other feasible options for paying for long-term care besides Medicaid.  A Washington, D.C. estate planning lawyer can help you find the best way to afford long-term care.

Medicaid Nursing Home Care Is Not Exactly a Comfortable Retirement

Medicare pays for many medical expenses for seniors, but it does not pay for nursing home care.  The only exception is that it will pay for up to ten weeks of rehabilitative and convalescent care in a nursing home after a hospital stay or surgical procedure.  Medicaid, the federal program that provides medical care for low-income individuals of all ages, pays for residential care in a nursing home for people who need long-term care but cannot otherwise pay for it.

Do not be so quick to assume that you can qualify for Medicaid nursing home care, however, and do not be so quick to assume that you want to.  Simply having assets valued below a certain threshold is not enough to qualify.  Instead, your assets must have remained consistently low for the five years leading up to when you applied for Medicaid.  This is known as the five-year lookback rule.  Yes, you can spend down your assets to qualify for Medicaid, but you have to do it sooner rather than later, and it means five or more years of a very modest lifestyle while you are in reasonably good health.  If you move into a nursing home as a Medicaid recipient, your Social Security check goes straight to Medicaid, and the only money you ever receive in the personal needs allowance, which, in Maryland, is only $90 per month.  Worst of all, when beneficiaries of Medicaid nursing home benefits die, Medicaid can file claims against their estates for reimbursement.

If you are still working, it is in your interest to buy long-term care insurance or a hybrid life insurance policy.  The sooner you buy one of these policies, the more affordable it is.

Contact Us Today for Help

A Washington, D.C. estate planning attorney can help you make plans to afford long-term care when you need it.  Contact Tobin, O’Connor & Ewing in Washington, D.C. or call 202-362-5900.



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