Many individuals are unaware that if they require long-term care, such care is only covered by Medicare or other primary health insurance for a short time. For example, Medicare may cover up to 100 days of nursing home care so long as the patient needs skilled care. However, if that patient requires care beyond Medicare’s coverage limit, then without any long-term care insurance, that patient would be responsible for the full cost of his care. With many nursing homes charging more than $500.00 per day, such a cost is unaffordable for many. Thus, Medicaid is the only option available to them.
As Medicaid is a means-tested benefit, an applicant has the burden to prove that she is financially eligible. In New York, this requires submitting an application with supporting documentation to the applicant’s local department of social services. The rules governing Medicaid are complex, and quite often each county’s department of social services interprets these rules differently. Therefore, it behooves an applicant to retain the services of an elder law attorney to assist her with navigating the Medicaid minefield.
A person is not obliged to retain a lawyer to assist him with applying for Medicaid. Many professionals such as social workers can and do assist their clients accordingly. Many people are tempted to retain the services of a non-lawyer because they believe it will save them money, but only lawyers can give legal advice.
Attorneys will not only assist their clients in preparing their applications, they will also advise them on options to preserve all or a significant portion of their assets by reviewing their estate plans and advising them on any tax implications. Even though lawyers may charge a higher fee, lawyers will most likely save their clients money in the long term.
The following examples illustrate why it is almost always in an applicant’s best interest to retain the services of an experienced elder law attorney:
1. Judith had very few assets other than her home, and she needed to apply for Medicaid for home care. She hired a home care agency who told her that they would prepare her application at no charge. What the agency failed to do was advise Judith that, when she died, her home would pass through her probate estate. On her death, Medicaid filed a claim against Judith’s estate in order to recoup the money it had spent on her care. Once Medicaid’s claim was satisfied, there was almost nothing left for Judith’s children. An attorney could have advised Judith on how she could have protected her home so that it would pass to her children in accordance with her wishes.
2. Nancy was in her early 70s and in good health, but she was concerned she would need long-term care down the road. She heard that Medicaid might attach a lien to her home or make a claim against her estate. Nancy decided to transfer her home to her children hoping that, if she needed care, the “look-back” period would have passed and her home would be protected. However, when her children sold Nancy’s home after her death, they had to pay capital gains tax. An attorney could have advised Nancy as to how she could have transferred her home without her children incurring adverse tax consequences.
It is almost never too late to take steps to try to preserve your assets in the event you need long-term care. If you would like to learn more, it is advisable to speak to a knowledgeable elder law attorney.
Written by Ronald A. Fatoullah, Esq., Principal of Ronald Fatoullah & Associates, a New York law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate.