Why Do People Need To Plan For Long-term Care Expenses?
In Oklahoma, long-term care expenses can easily run to almost $100,000 a year. That is not for a mansion. It is for a place that would barely be willing to have a family member live in. This is a lot of money. Even if you only live there for a couple of years, the expense can devastate a really good savings account.
Some people have come to believe that the government will pay for the price of long-term care, but that is only for people who are medically qualified and who have $2,000 or less in countable assets. Occasionally, a nursing home or a well-meaning social worker will convince a family to ignore the homestead where the patient has been living and put them on Medicaid to pay for the tremendously large nursing home expenses. That is almost never a great idea. There is almost always a much better way to deal with the situation. Unfortunately, most attorneys, social workers, and nursing home workers have no idea that it is possible to leave a meaningful inheritance for your family while still being able to get Medicaid to pay for the expensive costs of long-term care.
In some states, but not Oklahoma, you can actually have a retirement account and still qualify for Medicaid to pay for your nursing home care. In Oklahoma, however, that is not the case. Your retirement account is going to disqualify you from Medicaid assistance. Fortunately, that does not have to be the end of the story. That is just the beginning of the story. With a well-qualified Medicaid attorney, you can save much of that value for the benefit of your family.
Most families that I speak with have a strong desire to leave the legacy for their children and grandchildren. Perhaps they want to take care of an incapacitated daughter, or perhaps they want to help a grandchild get through college without overwhelming student loan expenses. Whatever the reason, you are generally going to be far better off by quickly reaching out to an estate planning attorney who is well-qualified in helping with Medicaid planning. But keep in mind that most attorneys are not so qualified. Unfortunately, some of them don’t even know what they don’t know. So seek out a well-qualified attorney, preferably a Certified Medicaid Planner, who does lots of continuing education, is able to help you save as much as possible, stay as independent as possible, and stay in control as long as possible. This is your quality of life, don’t let it slip away.
Is Medicaid Planning Ethical?
This is one of my very favorite questions when it comes to dealing with long-term care expenses. For a while, I also struggled with this question. It occurred to me like this: Why would it be ethical to help someone get qualified for Medicaid before they have used up all of their own money?
Finally, I have an answer. Here it is. I, like so many of you, am a small business owner. Two or three times a year, I go to my accountant and ask, “How can I reduce my taxes?” My accountant looks closely at all the numbers, studies the rules, studies the exceptions to the rules, considers my personal priorities, looks at my family situation, examines my business practices, and then, he gives me guidance as to how to reduce the amount of money that I give to the state of Oklahoma and to the United States Treasury. To this point in my career, decades now, no one has ever told me, and probably not even thought for a moment, that it is unethical for me to seek guidance from my accountant on how to reduce my taxes and keep as much money as possible for myself and my family. I believe that Medicaid planning is precisely the same. There are rules, there are exceptions to rules, there are ways to get relief from some of the rules that appear to have no exceptions, and there are many methods whereby you can retain more money for yourself and your family while still getting the help that you need. I think that this is morally and legally equivalent.
You will never find me helping anyone violate the law. But you will find me helping them use every option that the law allows to help keep every penny possible for themselves and their family while reducing the amount of money that they lose. Therefore, I can tell you from the bottom of my heart, and without any hesitation, that Medicaid planning is not only ethical, it’s urgent. Do it.
What Are The Main Sources Used To Pay For The Cost Of Long-term Care In The United States?
Medicaid is the single largest payer of long-term care expenses in the United States. It dwarfs all other sources of payments for long-term care.
Let me tell you at least one of the most important reasons why this is the case. First, long-term care insurance has become extraordinarily expensive to the point that most families cannot afford it and still put food on the table.
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The second reason is closely related, and that is because long-term care insurance companies have become extraordinarily particular about to whom they are willing to sell this insurance. For example, if you have suffered a knee injury and sought medical care for that injury, there is a significant risk that many of the long-term care insurance providers will not even sell you a policy. It reminds me quite a bit of the old saying that a banker is a person who is willing to loan you an umbrella right up until he thinks it might rain. Well, long-term care insurance companies are willing to sell you a long-term care insurance policy unless they think you are actually going to use it! Therefore, if you’re not in perfect health, and if you’re not rich, there is a substantial likelihood that you are not going to be willing and able to purchase long-term care insurance at a price that you are willing to pay. That leaves Medicaid as the payer that you are eventually going to have to rely on. That’s not necessarily a bad thing, it’s just the fact. From this fact, you should reasonably be thinking that you should be planning for Medicaid because more and more of us are going to need long-term care. We are living longer lives, and our chances of needing help grow over more as we continue to age. Every morning, when I wake up, it seems that something new is hurting. I recognize clearly that the time will come when I am going to need more assistance. It might be sooner, or it might be later. But the time is coming. Not just for me, but probably for you as well. Therefore, if you are thinking about Medicaid and the cost of long-term care, it’s probably time for you to start planning today. Give us a call.
Medicaid Is Only For People With Significant Financial Need, Right?
There are two basic ways to qualify for Medicaid assistance to pay for long-term care needs. The first, way is to not do any planning in advance and just spend all of your life savings paying for long-term care expenses until you are down to your last $2,000 of countable assets. By doing so, you can then qualify for Medicaid assistance. If you are thinking only as a taxpayer, and not as a mother or grandparent, maybe this is reasonable and appropriate. On the other hand, if you have children, grandchildren, or even greatgrandchildren, whom you want to help after you have passed from this life, you need to do some serious Medicaid planning so that your entire financial net worth does not become completely devastated by the cost of long-term care.
Long-term care is extremely expensive, and most people cannot afford it for very long. But, if you make a plan in advance with a qualified Medicaid planner, you do not have to wait until you are destitute before Medicaid will assist you. Seek out a certified Medicaid planner, or, at very least, a good attorney who practices Medicaid planning a lot. This is not a task to be dabbled in. This calls for great expertise and you’re worth it. You would never go to the local emergency clinic for a heart transplant. Likewise, you should never go to a general practitioner for Medicaid planning. It’s not going to work out well.
What Is A Period Of Ineligibility Or Penalty Period?
Many people recognize that sooner or later, they are going to need some Medicaid assistance. Unfortunately, most people wait until long after the last minute, and then, they make really poor decisions about their Medicaid planning. They rush and give things away thinking that they will somehow be able to cheat the government into giving them Medicaid assistance. This does not work. It is an absolute recipe for financial disaster. Let’s use Oklahoma as an example. If you give your house to your granddaughter, who desperately needs it, and you do so in a manner that causes a disqualification for Medicaid assistance, if you become desperately ill and unable to care for yourself, Medicaid will tell you that you are disqualified for assistance, probably for a term of years. That means that somebody in the family has to either write big checks or step up and become your long-term care provider without any reasonable financial reward for doing that. First, you will probably get unprofessional assistance, and second, you will be a financial burden on the family. You would never, knowingly and willingly, inflict such a burden on your family, but in a state of panic and fear, you might do it because you failed to seek out qualified and wise Medicaid assistance. Don’t be one of those people. Think ahead. Use wisdom and seek out professional guidance. Don’t inflict fear and financial destruction upon your family by creating a disqualification period.
How Much In Countable Assets Can A Single Person Have And Still Qualify For Medicaid Assistance To Pay For Their Long-term Care In Oklahoma?
On the front-end, this is an easy question. The textbook answer is that a single person can only have up to $2,000 in countable assets and still qualify for Medicaid assistance. But, just like every other important question in life, the devil is in the details. Part of the answer is going to depend upon the definition of countable assets, of course.
There are some especially important assets that don’t qualify as countable assets. You need to know what they are so that you can decide whether you want to maximize those assets to provide for your own needs and still qualify for the assistance you need in order to live.
First, keep in mind that you can have a prepaid burial plan with an unlimited maximum in it and still qualify for Medicaid assistance. Therefore, if you have your heart set upon a big monument and a funeral at the largest church with the fanciest casket known to mankind, you can do that. I don’t know that I would go that far for myself, but the law allows it.
The law allows you to have a significant amount of life insurance, as so long as it is not a cash value life insurance with more than $1,500 in value. Therefore, it is quite possible that you can use life insurance to leave a substantial helpful legacy for your family and still qualify for Medicaid assistance. Just be sure that you don’t have a cash value in excess of $1,500.
Next, you can have a car. That is not a countable asset. And I could go on, and on. All of this means that if you want to maximize your independence, maximize the legacy you leave behind, maximize the ways in which you can help your family, and have as much independence as possible for the future, you should be seeking out a certified Medicaid planner, or, at the very least, an attorney who does many Medicaid applications and Medicaid cases every year. This is not the time to go to your local general practitioner. You wouldn’t go see the nice guy who operates the minor emergency clinic to get your heart or lung transplant, and you should not use a general practitioner to try to do your Medicaid planning. Neither one of those is going to end well. Both providers may have the best of intentions, but you’re using the wrong person to do the job.
What Is The Difference Between Medicare And Medicaid?
This is a confusing issue for many people, in part because the terms are so similar that it is easy to mix them up, even for well-qualified attorneys. Think of it like this: Medicare is very much like traditional medical insurance. It pays for things like doctor visits, hospitalizations, surgery, sometimes a ride in an ambulance, and so forth. Medicaid, on the other hand, will pay for long-term care. Unfortunately, this can make it even more confusing because Medicare will also sometimes pay for some care in a facility that also takes Medicaid patients. Confused yet? Let me give you a little bit more guidance. If a Medicare patient is actually admitted to the hospital and stays there for two overnights, and is later discharged directly into rehabilitation, which often happens at a long-term care facility, they may be in a room right next door to a long-term care patient who cannot get any assistance from Medicare to pay for their stay. Medicare will pay 100% of 20 days’ worth of rehabilitation, provided that the patient is cooperating with the rehabilitation. If the patient quits cooperating and improving, Medicare is going to quit paying. After 20 days, Medicare can pay 80% of the next 80 days of rehabilitation. Unfortunately, even 20% of the cost of staying in a long-term care facility with rehabilitation can be extraordinarily expensive. And, at the end of the 80 days, Medicare is done. No more payments for this facility coming from Medicare. So, it would be reasonable for you to be confused when you see people in one room receiving Medicare payments and people in the next room who don’t qualify for any Medicare assistance, even though they are in the exact same building. So, if you find yourself puzzled by all of this, you are not alone.
I urge you to seek out assistance from a Certified Medicaid planner, or, at the very least, from an attorney who does lots of Medicaid cases every year. Don’t try to do this on your own, and don’t use someone who dabbles in the area. This is not for amateurs. You deserve more. Treat yourself right. Treat your family right. Seek out excellent guidance and wisdom when you are approaching the age or condition that you are likely to need some long-term care in your future.
For more information on Medicaid, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (405) 754-4166 today.
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