I am always continued to be amazed by how little people understand about long-term care and the concept of Medicaid. I have heard many things such as "Medicaid is only for the poor" or "I'm taking advantage of a program meant for the poor" or "hiding your assets has to be illegal or unethical" or even "I can self-pay myself through the nursing because I have long term care insurance." No matter the reason that I hear, these are all common misconceptions about Medicaid and nursing home costs.
First, if you engage in Medicaid planning are you taking advantage of a program meant for the poor? I would argue no. Your loved one spent their entire life paying into a system (Medicaid) of which they will not receive the benefit. How is it right, fair, or ethical for your loved one to lose everything they own in their later years after paying into the system their whole life?
Second, is hiding your assets to qualify for Medicaid illegal or unethical? The answer is a resounding NO. The rules and law regarding Medicaid/TennCare are complicated. Part of the rules have to do with qualification processes, but other parts of the rules have to do with transfers within 60 months before filing for Medicaid.
Third, can you pay your own way through with long-term care insurance? The answer is I don't know! This will all depend on your circumstances. However, the average cost of a nursing home can range from $60,000 to $110,000 per year, and the cost is going up! In addition, by 2050, it is estimated that 85 million people in the United States will be over the age of 65 and 1 out of every 2 will require nursing home care during their life. Having long-term care insurance may be part of your solution to this concern. However, it is certainly not the entire solution to the issue affording long-term care.
Finally, there is the unknown intruder that can take the remaining family wealth known as ESTATE RECOVERY! This is a concept whereby Medicaid has the right to seek recovery of the amount of money that Medicaid paid out regarding your care.
Case Study: Due to declining health, John was forced to go to the nursing home. During his time in the nursing home, John was receiving Medicaid/TennCare benefits to pay for his care. After 3 and 1/2 years, John passed away. After John died, Medicaid/TennCare sought to recover the $78,500 claim they had over his estate for the costs paid out for his care. John's children had to sell the family home and pay the $78,500 claim to Medicaid/TennCare before distributing the remaining assets.
Unfortunately, this is 100% true! Medicaid/TennCare has the right to recover the amount of money they paid out on your behalf when you were in the nursing home after you die. They do this by exercising a TennCare lien on the estate, and can even force the sale of the home to recover their costs. When families fail to plan in advance, the result is devastating not only to the family during your lifetime, but after death with the costs paid out in the form of Estate Recovery.
Time is of the Essence When it Comes to Long-Term Care Planning!
What If You Waited Too Long and You Are Going Into the Nursing Home Soon?!?!? Well, You Still Have Options, But Again, Time is of the Essence!
If you have questions regarding Medicaid and Long-Term Care Planning to Protect Your Assets from the Nursing Home, Long-Term Care Costs, and from Estate Recovery, then please contact our office at (615) 472-2482 to schedule an initial consultation to discuss your options with our Elder Law Attorney, Daniel Perry.
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