At some point in your life, most likely when you are older, you may need to qualify for Medicaid benefits in order to cover the high cost of long-term care. If you have never needed Medicaid benefits before, you may not know what qualifying entails. This is one of those cases where a lack of knowledge can truly hurt you because it may result in putting your assets at risk. The best way to protect your assets when applying for Medicaid in St. Louis is to include Medicaid planning in your overall estate plan now. A better understanding of the Medicaid eligibility rules may help you understand why this is so important.
Why Would You Need to Qualify for Medicaid in St. Louis?
Your need to qualify for Medicaid may occur as a result of your need for long-term care (LTC). The older you are, the higher the odds that you will eventually need LTC. When you enter your retirement years, you stand a 50-50 chance of eventually needing LTC. If you are still around at age 85, those odds increase to a 75 percent chance that LTC will be in your future. Nationwide, a year in LTC runs about $80,000. While Missouri’s LTC rates tend to be slightly lower than the national average, you can still expect to pay about $60,000 a year, on average, for LTC. Moreover, neither your basic health insurance policy nor Medicare will cover LTC expenses. Therefore, you will be stuck paying out of pocket unless you can qualify for Medicaid which does cover LTC costs.
The Problem Qualifying for Medicaid
The problem qualifying for Medicaid benefits is that the program has very low income and asset limits that an applicant cannot exceed. As a senior on a fixed income you may not have a problem with the income limit; however, the asset, or “countable resources” limit could be a problem given that it is only $999 for an individual applicant. Missouri does exempt some resources, including:
- Your home, regardless of the value, as long as it is the principal place of residence for you, your spouse, or a dependent child. Your home includes any surrounding property that is not separated from your home by someone else’s property.
- Household and personal belongings, such as furniture and appliances, clothing and personal effects, wedding and/or engagements rings.
- Tools of a trade or occupation, and farm supplies, livestock and similar items in some restricted instances.
- One automobile or truck per household, unless special circumstances exist.
- A life insurance policy up to a very limited value (this is an instance in which Illinois and Missouri law differ). Term life insurance policies and group policies that have no cash surrender value are exempt.
- A prepaid funeral and burial plan, if irrevocable; however, if the value of the prepaid funeral and burial plan is more than $1,500.00, then all life insurance cash value will be non-exempt.
- A burial space for you and for each member of your household.
- A very limited amount of otherwise non-exempt assets.
Many seniors, however, have non-exempt assets that exceed the countable resources limit. When that is the case, you will be required to go through a waiting period (the length of which is determined by a complicated formula that takes into account the value of your resources and the cost of LTC) before Medicaid will start covering your expenses. In essence, you will need to use your assets to cover your LTC costs during that period of time.
How Can You Protect Your Assets?
If losing your nest egg to LTC costs doesn’t sound appealing, the solution is to plan ahead. Because Medicaid uses a five-year “look-back” period, planning ahead is essential in fact. If you include Medicaid planning in your estate plan early enough, you can shelter your assets, often in a Medicaid trust, and avoid losing them later on. Doing so ensures that those assets are protected and that you will qualify for Medicaid benefits when you need them down the road.
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about Medicaid planning, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.