Planning for the inevitable is a sensible step for peace of mind that I wholly encourage. Reacting to a crisis by panicking and then searching the internet for answers is the step that more people follow.
College. Buying a home. Long Term Care. These are the big three expenditures that impact most families. College and Real Estate may offer a return on investment. Long Term Care is a giant hole which offers no such luxury. When a loved one requires daily assistance the payment options range from private pay out of your own pocketbook, long term care insurance policies, or Medicaid.
Long term care costs run from the tens of thousands to hundreds of thousands of dollars. Fifty years of savings can disappear at lightning speed. New York’s current Medicaid Regulations were designed to protect middle class families from financial ruin while balancing the need for fiscal responsibility. Nursing Home Medicaid is the most well-known entitlement. The five year lookback on financial transactions is quoted back at me several times a week by prospective clients. When all other living arrangements have failed a nursing home can offer the security and care that is required.
New York encourages care at home by not requiring financial look back periods and not penalizing transfers. Income requirements appear to be limiting, but Supplemental Needs Pooled Trusts can protect income above the Medicaid allowances. Medicaid offers unique Waivered Programs for specialized care services (Traumatic Brain Injury, nursing home quality care at home) and for selection and compensation of caregivers including friends and family. Participating Assisted Living facilities offer Medicaid assistance without look back periods or penalties.
An individual applying for Medicaid Medical Assistance must have available assets valued below $14,850 and monthly income below $825. Mention these eligibility requirements to any middle class client and they give up immediately. Like most things in life there is a part two to the Medicaid Eligibility picture. There are exceptions . Retirement accounts such as IRA’s, 401k’s, and 403b’s which are being distributed regularly or under RMD rules (we label them as being in “Pay-Out Status”) are exempt from Medicaid consideration. For a large segment of our client base these retirement funds make up the bulk of the family’s assets. A Medicaid applicant is allowed to own one automobile without it counting against the asset limit.
An elder law professional can educate you and your family on New York’s long term care Medicaid rules and provide a roadmap for asset preservation.