New York residents who end up in a nursing home can end up losing the majority of their assets. The expense of full-time nursing homes can be extravagant, costing an average of $8,821 per month for a private room. With Social Security benefits paying out an average of $1,500 per month, that’s a large financial gap for a person to fill.
How does Medicaid help?
Medicaid is a state-run insurance plan that offers assistance to those below a set income threshold. When determining your eligibility for long-term nursing care, Medicaid looks at the various assets you own. Any income from countable assets is counted toward your monthly income.
Some countable assets include your bank accounts, CDs, life insurance policy, stocks, bonds, real property and vehicles. Assets that fall into their non-countable category include retirement plans, personal property, pre-paid funeral expenses and your primary residence. If the value of these assets is too high, you may be denied Medicaid coverage.
How can Medicaid planning help?
When a person applies for Medicaid to pay for long-term care, they will have to go through what is referred to as a look-back period. This Medicaid look-back period is typically five years, but it varies depending on the state that you’re applying in. This look-back period involves submitting documentation regarding any assets that were transferred, given away, gifted or sold for below fair market.
To increase your chances of being covered by Medicaid, it’s advisable to speak to your attorney about Medicaid planning. This process allows you to turn your countable assets into non-countable assets in a legal sense. Through setting up specific trust funds, you can successfully transfer ownership of your assets in a way that won’t hinder your ability to get Medicaid coverage.
As you enter your golden years, it’s important to think about your future needs. By taking the time to properly prepare through Medicaid planning, you can help to keep the burden off your loved ones if you become unable to care for yourself. When undergoing Medicaid planning, it’s advisable to do so under the guidance of a licensed attorney.