Many people planning for their golden years aspire to age in place. They developed their plans primarily based on the idea that they intend to live independently and stay in their home for as long as possible.
Unfortunately, people don’t know in advance when they might sustain major injuries or develop medical conditions that require long-term care. People preparing for retirement may need to plan to cover long-term care costs. Generally, that means planning to qualify for Medicaid benefits. Advance planning is crucial for those who may require long-term care in the future.
Qualifying for Medicaid can be a challenge
Many older adults don’t understand the numerous restrictions on Medicare benefits. Medicare typically does not cover long-term care costs. People who need in-home nursing support or a bed in a nursing room generally need to pay out of pocket or apply for MassHealth, the Massachusetts Medicaid program.
When people apply, they must meet strict income and asset limits. The state doesn’t just look at an applicant’s current resources and income. Applicants are subject to a five-year lookback period. Any significant transfers, such as the transfer of resources to a trust, could result in a penalty. So could large gifts to friends and family members.
The state identifies inappropriate gifts and transfers. After totaling the value of those transfers, the state converts that figure to a number of months of care. Applicants then have to pay out of pocket for their care for that many months before Medicaid covers their costs.
For those who already meet Medicaid eligibility criteria, paying thousands of dollars every month for a room in a nursing home or home health support can be an impossible burden. Annual costs can easily exceed $130,000.
People generally want to plan for Medicaid eligibility as soon as possible. Beginning the Medicaid planning process while preparing for retirement is often a smart decision. That way, if they ever require long-term care, there shouldn’t be any large recent transfers to leave them at risk of a penalty.
Engaging in advance planning to qualify for MassHealth Medicaid benefits can make a major difference for older adults. Even those who never need long-term care may benefit from the peace of mind that comes from having prepared for potential future needs.