New Jersey Medicaid Planning Attorneys
Most elderly Americans cannot afford the level of private insurance needed to cover institutional care and costs associated with a serious, long-term illness. As a result, most elderly Americans turn to Medicaid at some point in their lives. However, under the terms of the Deficit Reduction Act (DRA), there is a look-back penalty attached to Medicaid coverage. Eligibility for Medicaid can be delayed if a person fails to transfer property (or reallocate assets) 5 years before applying for Medicaid. As a result, an elderly person may be required to spend down their assets or lose their home in order to qualify for Medicaid. At the law office of Levine & Levine, we explore legal options such as using trusts, annuities, income distribution pools, and other means that exempt certain kinds of assets and income from Medicaid eligibility calculations.
Regardless of whether you have an ailing spouse or are the adult child of an elderly parent, planning for Medicaid is important in order to avoid look-back penalties while taking advantage of available Medicare coverage. To schedule an appointment and learn how we can help you, contact elder law attorneys at Levine & Levine today.
Estate Planning Tools and Medicaid Eligibility
While each case is different, the following can be used to help an elderly parent or spouse qualify for Medicaid while avoiding the spending down of assets:
- Income distribution pool
- Special needs trusts
- Testamentary trusts
- Immediate annuities
- Transferring property
- Transferring ownership of home
Understanding How the Medicaid Look-Back Penalty Works
In general, under the terms of the DRA, for every asset transfer equal in value to an average month's worth of nursing home care in New Jersey, a person is assigned a month's worth of Medicaid ineligibility. For example, suppose the average monthly cost of nursing home care in New Jersey is $10,000. Suppose Mrs. Smith transferred $80,000 to her son less than five years ago. Under the look-back penalty, Mrs. Smith would not be eligible to receive Medicaid for 8 months ($80,000 ÷ $10,000 = 8 months).
Avoiding Impoverishment and the Spending Down of Assets
Under current laws governing Medicaid, there are a number of estate planning tools that can be used to reallocate money and exempt it from Medicaid eligibility calculations. Different kinds of trusts, annuities, and income distribution pools allow people to protect more of what they've worked hard to earn and save. If you fail to properly plan for long-term healthcare needs, you will be required to pay Medicaid with whatever assets you have available until you become impoverished. Our attorneys can discuss the options available to you and develop an estate plan that addresses long-term healthcare needs.
Contact Medicaid / Medicare Planning Lawyers at Levine & Levine
Healthcare for the elderly can be complicated. While Medicare can be used to cover short-term medical needs, it will not cover long-term health issues. There are also important issues surrounding Medicare Part A and Medicare Part B coverage and how they work. Our attorneys can explain these issues and help you plan for Medicaid eligibility so you don't have to spend down your assets to get the care you need.
To schedule an appointment at our Florham Park office, contact the Medicaid planning attorneys of Levine & Levine today.
