North Carolina Medicaid Planning
Common Questions That People Often Get Wrong
Important Considerations in Medicaid Planning
- Assets affecting Medicaid eligibility
- Transfers of assets and time limits
- Exempt property and assets
- Gifting, trusts and powers of attorney
- Reasons to use an elder law attorney
Do I have to give away everything to qualify for Medicaid?
NOT SO! You don’t have to be completely destitute to get Medicaid but rather have assets that are in a ”non-countable” form. If your spouse or dependent relative lives in your primary residence or if you ever intend to return home, then your home is non-countable. You can also keep personal items, a car, some life insurance and certain other assets.
Do I have to wait 5 years after giving my assets for Medicaid not to count them?
Medicaid does “look back” 5 years from the date of application for transfer of assets with some exceptions. Medicaid typically assumes that the assets given away in that five years were gifted to qualify for Medicaid benefits and will apply a penalty. Medicaid will take the amount of the gift and divide it by $6,300.00 to obtain the number of months of ineligibility for long-term Medicaid.
What if I transfer assets to my spouse? Will I be disqualified?
No. In every case you can transfer to a spouse with no penalty.
Is it true that I can keep all “my” property, inheritances, etc., and that it will not count towards my spouse’s Medicaid eligibility?
You will be able to keep some of these assets. There are protections for the “at-home” or “community” spouse, but the rules are complicated.
I’ve heard that I must “spend down” my assets on the cost of care to qualify for Medicaid. Is this True?
(Please speak to us before starting your “spend down” process)
You are allowed to keep certain property (non-countable) like a car, your primary residence, personal belongings, possibly collectables, etc.
NOTE: There are numerous “spend down” options. Please speak to us before starting this process.
Does my Power of Attorney automatically provide sufficient gifting authority to
move assets and apply for Medicaid?
Generally, NO! Powers of Attorney must contain specific language to permit gifting, creating trusts, and moving assets to a trust.
If I give away just $14,000 to all my kids and grandkids. Will Medicaid penalize the gift?
In a word…..YES. There is a difference between the annual gift tax exclusion for IRS purposes and what is permitted under Medicaid rules. Unless some other exception applies, every gift counts in computing Medicaid eligibility, no matter the value of the gift. Non-cash gifts of items like automobiles or tangible property count as well. Example: If you gave away $100,000.00 divided by $6,300.00 (Medicaid divisor) the period of ineligibility for Medicaid would be nearly 16 months.
Will Medicare cover the cost of a skilled nursing facility?
If we are talking “Long Term Skilled Care”, the answer is No. Medicare does cover Rehabilitative type services performed in a Skilled Nursing setting, but even then will only cover 100 days at most.
What you will pay for Rehab services in a Skilled Nursing or Rehab facility
You pay:
- Days 1–20: $0 for each benefit period.
- Days 21–100: $152 coinsurance per day of each benefit period.
- Day 101 and beyond: you pay all costs.
Source: www.medicare.gov/coverage/skilled-nursing-facility-care
A Quick Overview of Medicaid in North Carolina
Will I be able to qualify? Excluded assets:
- The Home, with an approximate equity of less than $536,000. The home must be the principal place of residence. The nursing home resident may be required to show some “intent to return home” even if this never actually takes place.
- Household and Personal Belongings such as furniture, appliances, jewelry, collectables and clothing.
- One Car, used to transport applicant or community spouse.
- Burial Plot for you and your spouse or an irrevocable funeral policy.
- Cash Value of Life Insurance policies as long as the face value of all of policies added together does not exceed $10,000. If it does exceed $10,000 in total face amount, then the cash value in these policies is countable.
- A certain amount that can be maintained by the “community spouse”, or the one remaining at home.
Why Use An Elder Law Attorney?
Both the qualifying process and the actual application are complex and a simple clerical error or misunderstanding a point of Medicaid law can cause extensive delays or denial. In addition, your core legal documents should be reviewed. Your will, powers of attorney and advanced directives should match your new situation. The earlier you plan, the more options are available. Call us today!
Additional planning completed for the community spouse and care to preserve your assets for your family. Proper planning needs to be completed to help protect assets from Medicaid “Estate Recovery”. (Estate Recovery means a claim is filed against the estate of a deceased recipient to recover Medicaid dollars paid on behalf of the individual)
There are two points in time you can call upon our services:
- Pre-planning: Here we can effectively protect your assets and create a plan that best suits your needs and legacy desires or;
- Crisis planning: When you are in or about to enter a Skilled Nursing Community.
We can help in both cases, but at times, crisis planning limits the options we have. We are a firm based on strong morals and ethics, helping you help those you love.
