In this article, you can learn about:
- Qualification requirements for Medicaid benefits
- Rules on transferring assets
- What happens when you give away assets
- And more…
Most nursing homes will complete the Medicaid application for their patients. The problem with this is they don’t know all the little ways to plan around some of the rules. There are strategies that could allow a person to save up to half of their estate by doing a combination of annuities and gifts. This is something the nursing home is not going to tell you because they either don’t have an incentive or they don’t even know how to do it.
Seeking the advice of an elder law attorney is important even if you didn’t do planning in advance because there’s always something that can be done on the backend to try to minimize the impact of Medicaid on your family.
Can A Person Whose Income Exceeds Medicaid Limits Still Qualify For Medicaid Benefits?
Louisiana doesn’t have income limits like other states have. In other states, there are trusts you can set up in which you can throw the excess income into and still qualify. Louisiana doesn’t have to deal with that. So, this is one that is not totally applicable, but can still be discussed.
What Are The Qualifications Requirements For Medicaid Benefits?
In Louisiana, all that is needed is for you to make less than the nursing home costs. If you are getting social security of $2,000 and a pension of $500 and the nursing home costs $6,000, then Medicaid is going to kick in and cover the difference.
However, if your income is $7,000 it is more than the nursing home and you do not qualify for Medicaid. You are expected to use your entire income if you are a single person.
There are different rules if you are married. The spouse will keep a certain amount of income and that is calculated by their attorney. If you make too much money, you won’t qualify for Medicaid.
The spend down is more important in Louisiana because your countable assets (your main assets) can’t be over $2,000 if you are single. If you are married, the non-nursing home spouse is allowed to keep some money; $137,400 is the current spousal resource allowance, but not a lot.
Are There Rules For Transferring Assets To Qualify?
You are not allowed to transfer assets to qualify for Medicaid unless you do it at least 5 years in advance. If you do transfer any assets, Medicaid will impose a penalty. It doesn’t mean they will deny your application, but they will impose a penalty period. The penalty period is a period in which you are going to have to pay for the care yourself until Medicaid deems that you’ve served out your penalty before they’ll start paying.
When you apply, Medicaid is going to look back 5 years and count all the gifts that you ever gave anyone. Anything you give away (Christmas present, etc.) all gets counted. Medicaid then takes that total and divides it by $5,000. That’s how many months of penalty you have to serve out before Medicaid will start covering your costs.
Can I Just Give Away My Assets To Qualify For Medicaid In Louisiana?
You can qualify for Medicaid if you give away assets at least 5 years ahead of time. However, there are better ways to plan without totally giving away your assets.
The biggest mistake people make is that they will give away their house to their child(ren), then 3 years from now they apply for Medicaid and have to report all these gifts. Then they must calculate the penalty… and a house is a big gift.
The penalty could be 2 years and then they are stuck because now they have no money and worry about having to pay for those 2 years of care because Medicaid isn’t going to cover it. It can create a huge mess if a loan was put on the house, and you try to give it back.
Therefore, it is recommended that if you are going to do any sort of planning, get legal advice before just to make sure that you understand the risks and the time period you are going to have to wait before you can put in a successful Medicaid application.
For more information on Planning For Nursing Home Care In Louisiana, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (225) 465-1090 today.