Like most people, you may very well make it to the end of your working years without ever giving Medicaid eligibility a second thought. After all, you had employer sponsored health insurance and your income was (fortunately) too high to qualify for programs such as Medicaid. Why then, would you need to worry about being eligible for Medicaid during your retirement years? Moreover, what is the “look-back” rule for Missouri Medicaid and why is it important? The answers to these important questions can be found in the probability that you, and/or a spouse, will need long-term care at some point before the end of your life.
Do You Really Need to Worry about Long-Term Care?
None of us want to consider the very real possibility that we will end up in a long-term care facility at the end of our lives. That possibility, however, is more of a probability the older you get. At age 65, both you and your spouse (if applicable) stand about a 50-50 chance of eventually spending time in a long-term care facility. If you are still here at age 85 those odds jump to a 75 percent chance with an average length of stay in a long-term care facility running about 2.5 years. As you can see, the possibility of incurring long-term care expenses is very real during your “Golden Years.”
How Expensive Is Long-Term Care?
As if the prospect of spending your last few years in a long-term care facility isn’t enough to think about, that very possibility brings up another important consideration – the cost of that care. Nationwide, you can expect to spend, on average, about $80,000 per year for long-term care. Fortunately, long-term care costs in Missouri tend to run below the national average; however, you can still plan on shelling out over $60,000 a year for nursing home care. If your stay is in line with the national average of 2.5 years, you are looking at a long-term care bill of about $150,000. How will you pay that bill? Don’t count on your everyday health insurance policy because most do not cover long-term care unless you purchased a separate rider. What about Medicare? Unfortunately, Medicare only covers long-term care costs in very specific circumstances and then only for a relatively short period of time. This is where Medicaid comes into the picture because Medicaid will cover the costs associated with long-term care.
Medicaid Can Help…But…Beware of the “Look-Back” Rule
The good news in all of this is that Medicaid can help…but, you have to qualify for benefits first. To qualify for Medicaid you must have income and “countable resources” (assets) that fall below the program limits. The limit for assets is often as low as $999 for an individual. Like the average senior, your countable resources will likely exceed the program limit. Simply transferring those assets to loved ones in anticipation of applying for Medicaid won’t work because Medicaid employs a five year “look-back” period. If your assets are too high, you will be expected to depend on those assets to help pay your expenses until your assets are sufficiently depleted to qualify for Medicaid benefits.
The five year look-back period allows the Medicaid program to review your finances for the five-year period prior to your application for benefits. If an asset transfer is identified, Medicaid may simply disallow the transfer and effectively impute the value of the asset back into your estate for purposes of determining your eligibility for benefits. In essence, anything sold, gifted, or otherwise removed from your estate during the five years prior to your application for Medicaid benefits may be ignored when determining the value of your estate. There are some exceptions that allow for certain transfers even during the five-year look-back period; however, you should assume that all transfers will be a problem unless your Missouri estate planning attorney tells you otherwise.
Because of the likelihood that you will need to qualify for Medicaid benefits, and the possibility of the look-back period creating an obstacle, it is best to discuss incorporating Medicaid planning into your comprehensive estate plan with your Missouri estate planning attorney.
If you have additional questions or concerns about qualifying for Medicaid, how the five year look-back period works in practice, or 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.