9 Feb 2019
When caregivers seek information about resources to meet their loved ones’ long term care needs, they may not know where to turn. Most often, people speak with their medical doctors, family, friends and coworkers as the first line of defense. Unfortunately, the information they gather is often not accurate or, more likely, not complete. As a result, people don’t take advantage of benefits available to them. The following are the most common myths I have come across regarding this topic:
MYTH: Eventually, my loved one will have to go to a nursing home.
FACT: Most people can receive the care they need in their home. Nursing home care is an option, not an “eventuality.”
MYTH: Medicare will pay for my long term care needs.
FACT: Medicare only covers acute care in a hospital, nursing home or home setting. It does not pay for long term care.
MYTH: I have long term care insurance so I am all set.
FACT: If you are lucky and planned well, this may be true. However, most policies have per day and lifetime caps. If you exceed either, you will need another way to pay for long term care.
MYTH: Medicaid is only for poor people.
FACT: Actually, many middle class people, who are now seniors or disabled, are enrolled in Medicaid and consider it a valuable resource to spare their families the financial burden of long term care.
MYTH: You have to spend all of your assets before you can qualify for Medicaid.
FACT: Not True! With proper planning, you can protect your assets by transferring them to a family member or a trust and still qualify for Medicaid. This can include property, investment accounts, life insurance, etc.
MYTH: There is a five-year look back for asset transfers so I cannot qualify yet.
FACT: This only applies for nursing home care. There is no look back period for long term home care; this means you can qualify the month following asset transfer.
MYTH: A long term nursing home placement is imminent, but I did no Medicaid planning so I am out of luck.
FACT: There are still strategies which allow you to protect 40 to 50% of your assets at the time of a long term or permanent nursing home placement. You should seek advice before you have to start paying privately for care.
MYTH: I cannot qualify because I receive a pension or other retirement income.
FACT: Yes, there is a Medicaid eligibly income cap. However, you can shelter all income over the cap through something called a Pooled Income Trust.
MYTH: I have to spend down my retirement accounts (i.e.; IRA, 401k) before I can qualify.
FACT: The principal of your retirement accounts is exempt from consideration in a Medicaid application as long as you are taking your Required Minimum Distributions (RMDs).
MYTH: I cannot qualify for Medicaid because I own my own home.
FACT: Your house is exempt as long as you live in it. If you go to a nursing home, it is exempt only under certain circumstances. If you live in your home until you die and you are the sole owner, Medicaid will seek asset recovery for exempt assets. So it’s essential to seek legal counsel on potential transfers.
As you can see, there are many misconceptions about long term care benefits. Consult an experienced, competent Medicaid specialist to discuss the possibilities: whether your aging loved one is still healthy or facing a debilitating illness. Knowledge is power.