Many older adults hope to never require Medicaid coverage. If they remain healthy, Medicare coverage may prove sufficient throughout their golden years. However, people who need in-home nursing support or a bed in a nursing home cannot rely on Medicare for those support expenses.
Instead, they typically need Medicaid to cover those costs. Planning well in advance for Medicaid is usually necessary. Otherwise, gifts and transfers that occurred in the five years prior to the application could result in a penalty. The Medicaid penalty can be incredibly problematic for older adults dealing with intensive support needs.
Adults have to wait for Medicaid benefits
If a review of a Medicaid application for long-term care identifies inappropriate gifts or transfers within the last 60 months, the state then imposes a penalty. The first step involves determining the full value of inappropriate gifts and transfers.
The state then converts that figure to a number of months of care based on average costs. The person seeking Medicaid benefits must cover their own care costs for a specific number of months before Medicaid coverage starts.
Given that they have already transferred or gifted assets to others, they may not have the resources necessary to cover those expenses. They may be left borrowing money at a high interest rate or asking family members for financial support.
Advance planning for Medicaid reduces the likelihood of a penalty or minimizes how long the penalty applies. Recognizing the risks of procrastinating about Medicaid planning can help people connect with the support they need when – or in advance of when – they become particularly vulnerable later in life.
