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Medicaid - Planning Ahead Can Save Assets


I ask many of my clients what will happen if they are diagnosed with a sickness such as dementia or Alzheimer's, or need twenty-four care some day. Very few of my clients can afford the cost of twenty-four hour care in their home or elsewhere. This type of care ranges from $40,000 to $100,000 per year. None of my clients can afford to lose this much in either income or assets.

Many of my clients tell me they think Medicare or Medicaid will help pay the bills if something happens to them. Medicare only pays for a limited amount of skilled nursing care. Most people pay for long-term care out of their own retirement accounts, savings, or get help from family until they become eligible for Medicaid. Although Medicare is an entitlement program, Medicaid is a form of welfare. To be eligible, many individuals would have to become "impoverished" under the program's guidelines.Despite the costs, paying privately for nursing home care may be advantageous. By paying privately, an individual is more likely to gain entrance to a better quality facility; the obvious disadvantage is the expense. In Colorado, state nursing home fees average $7,023 per month, or $84,276 per year. Without proper planning, nursing home residents can lose the bulk of their assets.The goal of long-term care planning is to protect assets while also qualifying for nursing home Medicaid benefits. This can be accomplished within the rules surrounding Medicaid eligibility. Why would you waste your hard earned assets when Medicaid could pay the bills after you've done careful legal planning?In Colorado, the Department of Health Care Policy and Financing administers Medicaid through local Departments of Human Services. The State publishes regulations in the Colorado Code of Regulations which it modifies frequently to carry out federal and state changes to the law. However, to qualify for federal reimbursement, the state program must comply with applicable federal statutes and regulations.If you are contemplating taking actions that could result in Medicaid impacts, then you should consult with an elder law attorney! Come see us, we can help.       - Tony Rossi

1 Comment

I strongly agree that long-term care planning is necessary especially now that the cost of long term care services continues to increase. Self-insuring is not advisable if you don't have enought assets because as you've stated above, a year of stay in a nursing home can cost you about $84,000. A family that has average income cannot afford this and their only chance is to apply for Medicaid. This government program is perfect for individuals who don't have enough assets and will need assistance in paying for long term care. Thank you for sharing this valuable information and I hope this will reach those concerned individuals.

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