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Most people have at least a vague idea of what Medicaid is and what type of benefits the Medicaid program offers to those who are eligible. Unless you have participated in the program before, however, you may find that much of what you believe about the program is not rooted in fact. As you get closer to your retirement years, it becomes more and more important to separate fact from fiction where Medicaid is concerned because you may find that you need to depend on Medicaid to cover your own, or a spouse’s, long-term care (LTC) expenses. The is particularly true when it comes to the Medicaid transfer rules. With that in mind, the St. Louis Medicaid attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC explain those transfer rules.

Will You Need Long-Term Care?

There is a strong possibility that you, or a spouse, will need long-term care (LTC) at some point during your retirement years. Of course there is no way to know with any certainty who will, and who won’t, end up in a LTC facility; however, statistics tell us that the odds increase with each passing year. When you reach retirement age, around age 65, you will already stand a 50 percent chance of eventually needing LTC at some point before the end of your life. Every year that passes, those odds go up. If you are fortunate enough to still be here at age 85, your odds of needing LTC will have increased to a 75 percent chance. Don’t forget, if you are married, your spouse shares the same odds of eventually need LTC.

The cost of LTC is the real issue though. As of 2017, you can expect to pay, on average, just over $6,000 per month for LTC in St. Louis, Missouri. With an average length of stay of 2.5 years, you are looking at a LTC bill of close to $200,000 if you were paying that bill today. Experts tell us that you can expect to pay over $130,000 a year for that same care 20 years from now, putting the average LTC stay at well over to $300,000. Although you may be planning to count on Medicare for your healthcare expenses when you reach retirement age, don’t look to the Medicare program to cover your LTC expenses because it won’t. For over half of all seniors in a LTC facility today, Medicaid is the answer.

Medicaid Planning and the Medicaid Transfer Rules

You may have friends or relatives who have told you not to worry because they just transferred their valuable assets to children when they realized the need to qualify for Medicaid. Not all that long ago that was possible; however, Medicaid now uses a five-year “look-back” rule that prevents asset transfers in anticipation of the need to qualify for benefits. Your finances will be reviewed and any transfers made for less than fair market value will likely be flagged. If you did transfer assets out of your estate for less than fair market value within the preceding five years, Medicaid may impose a waiting period. The way the waiting period duration is calculated is by taking the total value of the non-exempt assets that were transferred and dividing that by the average monthly cost of LTC in your area. For example, assume you transferred a non-exempt asset valued at $80,000. The amount over your allowable “countable resources” amount would be $78,000. You then take $78,000 and divide that by $6,200 (average monthly cost of LTC in St. Louis as of 2017) which gives you 12.58. Rounded up, you would be facing a waiting period of 13 months before Medicaid would start helping you with your LTC expenses.

This is why it is so important to incorporate Medicaid planning into your estate plan now, hopefully long before you actually need to rely on the benefits offered by Medicaid.

Contact St. Louis Medicaid Attorneys

If you have additional questions or concerns about Medicaid planning or the Medicaid eligibility rules, contact the experienced St. Louis Medicaid attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.