We were recently consulted by a gentleman whose wife suffered a disabling stroke. Her illness necessitated indefinite nursing home care. Paying for nursing home care is quite expensive. Generally, you are looking at three ways to pay for this type of care:
1. Self-pay using your own assets.
2. Long-term care insurance, which most people do not have.
3. Qualify for Medicaid, which is a need based program (asset and income criteria).
At the time his wife entered the nursing home, this couple has about $300,000 in countable assets (assets Medicaid considers in determining eligibility) that they had worked a lifetime to accumulate. The nursing home suggested to the husband that a Medicaid application be submitted on behalf of his wife. The nursing home is very well respected and was simply trying to help in this case. Unfortunately, this couple had way too much in the way of assets to qualify for Medicaid and the application was correctly denied.
The problem here is that once a Medicaid denial has occurred, strategies to qualify the wife for Medicaid and preserve assets may no longer be available . . . and that is what happened to this couple.
Basically, had the Medicaid application not be filed and denied, it is entirely possible that this couple could have implemented a plan to save all of their countable assets ($300,000), and still qualify for Medicaid. Now, there is about $150,000 at risk and other planning strategies may not be nearly as effective for this couple.
Nursing homes and care facilities deserve to be paid. They provide incredible and costly services to families under tremendous stress. However, there is little point for a family in filing a Medicaid application unless there is a high probability that it will be approved.
The important thing to remember is if your family is interested in protecting assets to the extent permissible and still qualify for Medicaid, it is important to seek competent legal counsel before any planning is done and before any Medicaid application is submitted.
