Medicaid Crisis Planning

SERVING CLIENTS THROUGHOUT THE ROANOKE VALLEY & BEYOND FROM OUR OFFICE IN SALEM

Sudden Changes and Big Decisions

Change is life’s only constant. Sometimes these changes strike without warning. If you or a loved one has experienced a sudden illness or serious accident, you understand how abruptly everything can change. Are you or a loved one suddenly in need of nursing home care? Finding and affording quality care on short notice can be stressful and draining. We can help you determine the best options for care and how to qualify for Medicaid to help finance them.

Long-term Care: Counting the Cost

Long-term care is expensive, and these costs only continue to increase as baby boomers age. Although the range varies depending on where you live, according to the Genworth Cost of Care Study for 2019 the national median annual cost of a private nursing home room is $102,200 with a 3% annual increase projected. With improved medical care, the average life span of adults also is increasing; this translates into more years of care at increasingly higher rates. Without some sort of financial assistance, these costs could be financially devastating. In fact, your entire life savings could be quickly depleted within a few years of needing long-term care. This is where Medicaid can help.

Medicaid is a joint federal and state program to assist those with low income and limited resources. While Medicare provides very limited long-term care coverage, Medicaid is much more extensive. However, because of its restrictions, qualifying for Medicaid can be extremely difficult. But paying for a nursing home without it could be all but impossible.

The Medicaid Maze

Although Medicaid requirements vary from state to state, they all share one common element: complexity. We advise clients regarding Medicaid eligibility in Virginia. A Medicaid applicant’s total assets cannot exceed a specified amount called the Individual Resource Allowance, which is consistently very low, and in Virginia is $2,000. Although certain possessions, like your home and automobile, are “exempted” for purposes of determining Medicaid eligibility, this figure is still alarming. If the applicant is married, the process becomes more complicated. The applicant’s spouse can keep the exempt assets including the home and one automobile, plus an amount of the “countable resources” (including money in the bank, investments, retirement accounts, and cash value of life insurance) calculated by Department of Social Services on a case by case basis called the “Community Spouse Resource Allowance.”  For the recipient to qualify for Medicaid in Virginia, the applicant’s spouse can keep only half of the couple’s assets up to a Maximum Community Spouse Resource Allowance of $137,400 (as of 2022).  So, in Virginia, if a couple has $150,000 in countable resources, they must “spend down” to all but $2,000 for the applicant and $75,000 for the spouse before the sick spouse can qualify for Medicaid.

What can you do if the value of your countable resources exceed the $137,400 Maximum Community Spouse Resource Allowance? If you give your extra assets away, which seems like an obvious choice, you will encounter greater problems. Violating this “Transfer Penalty Rule” could disqualify you from receiving Medicaid for months or years, depending on how much you gave away. We can explain what your options are to spend down the extra countable resources without triggering any Medicaid penalties. Options include using the extra resources to buy exempt assets or to create an income stream for the well spouse, including the purchase of a Medicaid compliant annuity.

The Medicaid Qualification Process = Legally Protecting the Maximum Amount the Law Allows

This is only a brief and oversimplified review of a few Medicaid rules, of which there are many more. Navigating them on your own could be a nightmare at best and subject you to penalties at worst. Fortunately, though, our experienced attorneys and paralegal can guide you through the Medicaid maze. Our legal team can advise you throughout the application process, ensuring that you retain the maximum income and total assets permitted by the complex Medicaid rules.

Conclusion

Seek appropriate counsel before you apply for and seek to qualify for Medicaid. We can give you – and your family – peace of mind during a difficult and uncertain time.