Medicaid & Nursing Home Planning Attorneys in Dayton

Using Medicaid vs. Medicare to Pay Nursing Home Expenses

If possible, it is better to use Medicaid benefits to pay for nursing home expenses instead of Medicare benefits, for several reasons. The main reason is that Medicare only covers up to 100 days in a nursing home; therefore, Medicare is not a viable option to pay for long-term care in a nursing home. Medicare does not cover as many services and expenses as Medicaid, so you may be limited in the treatment options available if you use Medicare.

Unfortunately, Medicaid is a state and federal program that pays for medical care for low-income individuals. You must meet financial requirements in order to qualify for Medicaid benefits. If you do not meet the financial requirements, an experienced nursing home planning attorney may be able to assist you in becoming “medically needy” to meet the financial requirements for Medicaid benefits.

Spending Down Assets to Become Eligible for Medicaid Benefits

Before you consider spending down assets, you must consult with an attorney who has extensive experience in nursing home planning and Medicaid issues. First, some medical conditions may automatically qualify you for Medicaid benefits, regardless of your assets. If you do not have a medical condition that automatically qualifies for Medicaid, you may want to consider spending down assets to become eligible for benefits.

Unfortunately, many people assume they can “gift” their assets to family members as a way to reduce their overall net worth to qualify for Medicaid; however, Medicaid has rules regarding gifts or transfers during the five years before you apply for Medicaid. Therefore, careful planning is required in order to reduce your countable assets to qualify for Medicaid. An experienced nursing home attorney knows the assets that are countable toward the maximum limit for assets and the best way to reduce your countable assets that won’t negatively affect your Medicaid application.

Are There Risks Involved With This Type Of Nursing Home Planning?

The most serious risk associated with this type of nursing home planning is the loss of control of assets. When you are “gifting” assets to someone, you lose control over that asset. The asset then becomes the property of the receiver to do with whatever the receiver wishes. The person you give your assets to may lose the assets in a divorce or bankruptcy, decide to sell those assets, or pass away leaving the assets to be distributed through the person’s probate estate. Choosing who should receive your assets is a very important and crucial decision when attempting to reduce your countable assets to become eligible for Medicaid.

Is There a Better Way?

Yes, a Medicaid trust can serve the same purpose without risking your assets. By establishing an irrevocable Medicaid trust, you are transferring your assets to the trustee of the trust rather than to a specific person. The person you appoint as your trustee manages the trust according to the terms of the trust, but the person does not own the assets within the trust. The trustee normally does not use the assets in the trust for their benefit. Instead, the assets are held inside of the trust and, if used correctly, can be a source of funds to pay the expenses of the senior citizen who is in the nursing home.  Another benefit of the trust is that the assets within the trust are protected from the trustee’s creditors and probate estate.

Medicaid Trusts:

• Holds gifts that make the parent(s) poor
• Safer than gifts to a child; protects the money
• Serves as a piggy bank to supplement needs that Medicaid will NOT provide
• At the parent’s death, funds go to beneficiaries and avoid probate
• Child serves as trustee; beneficiary can give money back to parent; parent loses control
• Irrevocable! (Sort of)
• Parent keeps income, pays bills, and stays in house if healthy enough