Preparing for the Future: Make Medicaid Planning Your New Year’s Resolution
New Year’s Resolutions are all about planning for long-term well-being. Getting back into gym means caring for your health. Improving your diet does the same. Making more time for family and friends addresses your mental health needs. And long-term care planning, like these more typical New Year’s Resolutions, addresses both the physical and mental sides of self-care.
The cost of a nursing home stay or custodial arrangement is more than most people can afford. According to a 2021 survey, a private room in a nursing home goes for an average of $9,034 per month. Nearly three of every four adults will need some form of long-term care in their lifetime and the median period for which this care is needed is 19.6 months. This means that unless you have nearly $200k of extra savings lying around, you probably want to consider Medicaid planning.
Medicaid planning protects your well-being and provides you and your loved ones with peace of mind. Knowing that your life’s work is protected and won’t be spent on healthcare costs allows you to retire without worry. If this weren’t reason enough to make this sort of planning a part of your New Year’s Resolutions, then knowing that doing so also protects your wealth for future generations surely should be.
Preparing for the Future Through Medicaid Planning
The first question everyone asks when considering using Medicaid to cover their long-term care needs is “do I qualify?”
In principle, the answer is always yes. All US citizens (and certain non-citizens) are eligible for Medicaid. Whether your application will be approved depends on your income and asset profile, however. Each state is different but all place strict limits on how much you can own and earn.
The entire purpose of Medicaid planning is to redistribute your assets such that you meet Medicaid’s eligibility criteria at the time you need coverage. Many tools exist to help you do this—and the experts and AshBer would be happy to walk you through each of them!—but each depends on exercising foresight.
Medicaid applies a five-year lookback period when assessing applicants. This means the program reviews the past five years of your financial transaction to ensure no improper transfers were made in order to qualify for coverage. If any such transactions are identified, a penalty period is imposed wherein the applicant is barred from the program. This makes including Medicaid planning in your New Year’s Resolutions all the wiser.
The sooner you begin the process of organizing your assets and income such that you can be sure to qualify for coverage, the better. After all, while seniors are those that need to worry most about long-term care costs, all of us are vulnerable to the unpredictable nature of life.