Last week we were talking about Charlie and Doris. We were in the midst of spending down assets and preparing to file a Medicaid application for Charlie, a nursing home resident, when he passed away. So no need to do anything further as far as long term care planning – right? Well, actually no, that’s wrong.
I explained to Doris that putting a plan in place now to protect her assets would insure that her children won’t need to respond in crisis if and when she needs care, in the way that she had to when Charlie became ill. It will be much more difficult for her children to provide that care. They have their own lives and young children to care for.
I also told her that if we set up a plan to protect her assets now, we could then qualify for Medicaid benefits without spending down everything she has first – provided we can get through a 5 years waiting period. That is what is known as the 5 year Medicaid look back. She knew exactly what I was talking about because she didn’t have the opportunity to do that when Charlie took ill.
Why is this so important? Not necessarily for the reason you may think. Some people think of it as “cheating the government” if I set aside some of my assets in a way so that I can qualify for government benefits without spending them first. To understand why that’s not true you first must realize that the State decides what it will pay for and what it won’t pay for. You’ve spent all your money, only to find that there isn’t a government program that will cover your needs. Now what? You’re out of luck.
On the other hand, if you’ve planned ahead, set aside some funds, and waited through the necessary period of time – the 5 year look back – you can qualify for government benefits available that might help you but you also have those same funds ready to supplement your needs. Doris wants to remain at home as long as possible. I explained to her that there are government programs that cover some amount of care at home but if she, at some point, needs round the clock nursing home level care she’ll need to go to a nursing home when she runs out of money – unless she has set aside funds as part of a long term care plan. She can then qualify for government aid to pay for some of the care and she’ll have the funds set aside to pay for the rest That’s how she can stay out of a nursing home.
I can always tell the exact moment when someone “gets it” – that “aha” moment. What I was saying suddenly clicked with Doris. Setting aside assets could mean she could qualify for VA benefits since Charlie had been a Korean war veteran. It also means she could qualify for home based Medicaid benefits which could help pay for her care needs and keep her out of a nursing home. It also means she could pass on a legacy – albeit a small one – to her children and that was something, she told me, that was always very important to Charlie.
Doris recognized the mistake she and Charlie made in failing to plan ahead. She knew that she didn’t want to repeat that mistake again. Lesson learned and so we got to work immediately on putting a plan in place for Doris and her family.