A bill was introduced in the House of Representatives to require the Congressional Budget Office to study the impact of a ten-year “look-back” for asset transfers to qualify for Medicaid. [House Bill 6300].
What does this mean for seniors who plan on Medicaid helping them pay for their long term care expenses? There is no change proposed for today. This bill just instructs the Congressional Budget Office to study the impact of changes to the Medicaid rules. One of the areas to be studied is increasing the look-back period for gifts from 5 to 10 years. That means, if you make a gift to a family member and then need to apply to Medicaid to help pay for long-term care expenses in your home, assisted living or a nursing home, and that gift occurred within the last ten years, the Medicaid program may not be available to pay for your care.
Another potential change is to reduce the amount of home equity a person may have and still qualify for Medicaid. Currently, if you are a married person, the healthy spouse may keep a home of an unlimited value, even if that home is $5 million. If you are a single person, to qualify for Medicaid, the maximum equity value of your home can be no more than $750,000. The potential change will reduce the home equity value to between $200,000 to $50,000.
What should you do? The earlier you plan to deal with the potential cost of long term care, the more of your assets you can protect for you and your family. Most people ignore the cost of long term care until they need it. The reality is 50-70% of us will need care in our homes, assisted living or a nursing home before we die! If you are lucky you will just die at home, but most of us are not so fortunate.
What does planning now mean? Consider the purchase of long term care insurance to help pay for your care no matter where you reside. If you cannot qualify for or afford the insurance, talk with a Certified Elder Law Attorney about other methods to protect your assets for yourself and your family, and still provide for your long-term care. We have no money in this country and have a huge public debt that will not be paid off for years. Our government cannot afford and will not be able to pay for the cost of care for all our seniors. To protect yourself and your family, it is best to be pro-active, and take steps now to secure your future.