“When is the best time to plan for Medicaid?” I get that question a lot. People want to know how they can Medicaid plan to help protect their assets. However, I find a more helpful start to the conversation is an explanation of what Medicaid is.
Medicaid is the government-run health coverage that covers the cost of nursing homes and other long-term care for those who cannot afford to pay for it privately. Because no one “plans” on going into a nursing home or needing long-term care—there is no true way to Medicaid plan in advance. Rather, here are three helpful tips on what you can do and what to be aware of as you and your loved ones age:
1. Have a Good Estate Plan in Place
Having a good estate plan in place is the first step to planning for Medicaid—although not in the way one may originally think. Most people do not know when, or even if, they will end up needing long-term or nursing home care. However, regardless of whether a person requires long-term or nursing home care—everyone needs a good estate plan. Having an estate plan that designates both a Healthcare Power of Attorney and a General Durable Power of Attorney for Finances will make the Medicaid application process significantly easier in the future. Be careful to make sure that a licensed New Hampshire Attorney drafts and executes your estate plan though—there is specific language which will need to be included in these documents to make sure that they can be used later when either you or someone else applies for Medicaid on your behalf.
2. Be Careful about Gifts
One of the most stringent regulations with Medicaid is known as the Five (5) Year Look-back. This regulation allows the State to review the financial records for a Medicaid applicant for the five (5) year period immediately prior to a Medicaid application. During this five year look-back, the State may flag any transfers of money or property that were given away, i.e. where the applicant did not receive any compensation in return for that money or property. Depending on the frequency and amount of these transfers—the State may impose a penalty period on an applicant during which the applicant is required to pay out of pocket for nursing home or long-term care.
3. Consult with an Attorney that Knows the Rules
The Five Year Look-back is just one example of the many rules and regulations that govern the Medicaid program. Because the regulations related to Medicaid are incredibly complex and in some instances, extremely broad, it is important to meet with an attorney who understands these rules prior to submitting an application for nursing home or long-term care to Medicaid.
If you or someone you know needs an estate plan or is at the point of needing to apply for Medicaid in order to cover your long-term care or nursing home costs—call the Law Office of Katherine J. Morneau, PLLC to set up an appointment with one of our attorneys here in Nashua, NH at 603-943-5647. We are happy to sit down with you to evaluate your needs and further explain the Medicaid process.