Medicaid planning is a daunting process due to the complexities surrounding Medicaid eligibility requirements. Strict asset and income limits must be maintained, and penalties resulting in loss of coverage or money owed to the state can occur if the planning is not done correctly. If you may receive Medicaid in the future, it’s best to consult with an experienced Ohio elder law attorney to make sure your strategies are sound.
It’s also important to keep in mind that Medicaid rules or planning strategies that worked a few years ago may no longer be acceptable and could cause you to lose benefits or incur penalties today. For example, prior to 2006, seniors planning on receiving Medicaid would often gift half of their assets to their children, while keeping the other half to pay for their care during a penalty period during which they are ineligible for Medicaid. This type of planning was called Half a Loaf, and it worked because the penalty periods began when the gift was made. However, when the rules changed in 2006, this strategy was no longer a viable option. More importantly, even gifts made for reasons entirely unrelated to Medicaid Planning, can cause unanticipated penalties with Medicaid if they occurred within the “lookback” period. The current lookback period is 5 years, but many elder law attorneys anticipate the lookback will be increased at some point.
The rules regarding your home, other real estate and farms have changed significantly over the past two years. Previously, a single person could retain their home, and sometimes other real estate for a period of time. The new rules force the home to be sold in a much shorter period of time. And other real estate must be sold promptly. The proceeds from the sale are then used to pay for care.
Annuities (large amounts of cash paid for future payments guaranteed during a person’s lifetime) were another common way to plan for Medicaid while still leaving a legacy for the family. Yet again, additions to the law eventually made annuity planning much more difficult. Prior to 2006, annuities for Medicaid planning could be made privately between families, were only based on life expectancy, and the monthly payments could vary in amounts. Since then, the law has undergone changes and now annuities must be purchased commercially, the payments must be made for roughly the same amount each month, and the state must be listed as the beneficiary on any annuity contract, so that in the event of the individual’s death, the state can then collect the money for payments made on the person’s behalf.
Medicaid planning can have a serious impact on your financial situation if done incorrectly. Just because a family member or friend had luck with a certain strategy years ago when qualifying for Medicaid, does not mean that it is a safe or viable option for your family today. If you’d like to learn more about Medicaid planning in Ohio, or if you’ve been denied Medicaid coverage and would like to appeal the decision, please contact our office at 877-653-3450 to schedule a complimentary initial consultation.