Costly Mistakes Can Impact Medicaid Eligibility for Long-Term Care
The costs of long-term care in Connecticut are extremely high, and making plans ahead of time to ensure that you or your elderly parent can pay for long-term care without depleting a lifetime of savings is an important part of any estate planning process. To give you a general sense of just how much long-term care can cost, consider some data from Genworth. For care in an assisted-living facility (which does not include medical care), the median monthly price in Connecticut in 2024 was nearly $9,000. For a year in an assisted-living facility, the total is more than $107,000. Care in a nursing home is even more expensive since this type of facility provides medical care to residents. For a private room in a nursing home, the median monthly cost in 2024 was nearly $17,000. For a year of care, that totals nearly $200,000. Even a shared room is extremely costly, coming in at approximately $15,000 per month or more than $180,000 a year. And the prices are only rising.
These extremely high costs mean that a majority of Connecticut residents will want to become eligible for Medicaid so that Medicaid covers the cost of long-term care. To be clear, this type of care is not covered by Medicare. If you want Medicaid to cover these costs without depleting your bank accounts and other assets, you will need to work with a lawyer on Medicaid planning. In the meantime, the following are some examples of common and costly errors that can affect your eligibility for Medicaid for long-term care coverage.
Do Not Gift Assets
You may know that you will need to have limited countable assets and income in order to be eligible to have Medicaid cover long-term care. Accordingly, you may be thinking about gifting assets to family members to whom you were planning to leave those assets anyhow. This is a leading mistake that people make when it comes to Medicaid planning and eligibility. If you gift any assets during the five-year lookback period (the five years prior to the date you need Medicaid coverage for long-term care), you can be penalized for gifting any assets, and your eligibility for future Medicaid coverage can be impacted.
Do Not Assume Long-Term Care Insurance is Sufficient
If you have long-term care insurance, it can help to pay for long-term care, but it is often insufficient to cover all of the costs of care. In proper Medicaid planning, long-term care insurance is one component but typically is not enough to prevent the need for Medicaid coverage.
Do Not Assume Placing Assets in a Revocable Trust Will Prevent the Need to Spend Down
In order for assets held in a trust not to be countable for Medicaid eligibility purposes, they need to be held in a particular type of irrevocable trust designed for Medicaid asset protection. A lawyer can help you to establish a Medicaid asset protection trust and to provide you with more information about other types of trusts that might be able to protect your assets. In the meantime, it is essential to know that having assets in a revocable trust will not protect them; you will still need to “spend down” in order to qualify for Medicaid, and if you end up gifting those assets to loved ones, you can be subject to the penalties described above.
Contact a Canton Elder Law and Asset Protection Attorney for Assistance
Before you take any steps that could impact Medicaid eligibility for yourself or for an elderly parent, it is important to seek legal advice. An experienced Canton elder law and asset protection lawyer at the Law Office of Brian S. Karpe can speak with you today. We can learn more about your circumstances and guide you through the Medicaid planning process. Contact our firm today for assistance.
Sources:
carescout.com/cost-of-care
portal.ct.gov/oha/health-care-plans/other-plans/medicaid?language=en_US
