Why Medicaid Planning is a Must

According to the U.S. Department of Health and Human Services Administration for Community Living (ACL), in 2014, the older population (individuals 65 and older) was 46.2 million in the United States – representing 14.5 percent of the population.

The ACL estimates that by the year 2060, there will be about 98 million elderly adults in the U.S., which is more than double the 2014 statistics. With those numbers in mind, it’s understandable why so many older Americans are concerned about one day having to move into a nursing home.

As more Americans are reaching their 70s, 80s, and beyond, their adult children are struggling to provide proper care. Often, a nursing home is the best choice for the family, but it comes at a price. Depending on the location and facility, a nursing home can range from $40,000 to $180,000 per a year.

Generally, an elderly adult has to pay for their nursing home care out of pocket until their savings run out. Once the senior has exhausted their savings, then Medicaid will pay for the rest. For elderly adults who wish to leave an estate to their children, costly nursing home bills can defeat their goal, all the while bleeding their assets dry.

However, it doesn’t have to be this way. There is something families can do to qualify for Medicaid without depleting their assets, and it’s called Medicaid planning.

Medicaid Planning to Protect Assets

Elderly adults can plan in advance to prepare for the anticipated need for long-term care, and they can protect their estate in the process, whether they want to leave assets to their spouse or children.

Individuals can accomplish this by purchasing long-term care insurance, or by distributing their assets in such a way as to protect them in advance, well before they are in need of nursing home care.

By planning while the senior is independent, if the senior one day needs nursing home care, they can quickly qualify for Medicaid, without being subject to the “look-back” period, which can derail a family’s plans to protect their wealth.

Effective Medicaid planning varies from person to person since each individual’s financial situation is different. To learn more about this process, contact an estate planning attorney for legal advice.