If you’re thinking that you do not have to concern yourself with the rising cost of long-term care because you will be receiving Medicare when you reach the age of 65 you may want to think again. Medicare does not cover long-term care, so for many people taking on these types of expenses late in life would be difficult on a personal financial level while being potentially devastating to their legacies.
Though Medicare does not cover long-term care the social welfare program known as Medicaid does. Medicaid was originally conceived as a way for the government to provide medical care for the poor, but at this point it is commonly used by older Americans as a way to address long-term care costs.
Because Medicaid was conceived as a need-based program there are financial requirements that one must meet in order to become eligible for Medicaid. You can’t have more than $2000 in assets, but your home, your car, and your personal possessions don’t count. So a lot of people will start to give gifts to their loved ones in advance of an anticipated stay at a long-term care facility in an effort to “spend down” so that they qualify for Medicaid when the time comes.
This is a logical course of action given the playing field, but you have to plan in advance because there is a five-year Medicaid “look back” period. This means that any gifts that you give within five years of applying for Medicaid can result in a penalty that delays your eligibility.
Spending down for Medicaid purposes can be complicated but effective all the same if it is done correctly. If you are concerned about the rising cost of long-term care and considering Medicaid as an avenue of assistance, the wise course of action would be to consult with an experienced elder law attorney who will analyze your financial position and explain your options to you.