One of the most common questions we get here at Monteforte Law, on at least a weekly basis, is “How do I pay for Long-Term Care?” When we mention Medicaid & MassHealth as part of the answer, it is inevitably followed by “I have too much money to qualify for Medicaid.” Our response to that statement may surprise you. That’s because our usual response is “You’re wrong. We can get you qualified.”
Yes, Medicaid / MassHealth looks at your assets, and they can disqualify you from coverage if you have assets that are over their limit. In 2021, the asset limit is $2,000.00 for a single person. If the applicant is married, and the spouse is staying in the home and is not looking for coverage at the same time, the spouse is allowed to keep $130,380.00. While that sounds like a lot of money, and it is a lot, we are talking about the life savings of a married couple that have worked their entire lives, and likely have some retirement and other savings. So, if you have more than $132,380.00 as a married couple, can you still qualify for MassHealth long-term care coverage?
If your attorney sets it upright, then yes, you absolutely can.
How? Through the use of expert planning tools.
When it comes to long-term care, there are only three ways to pay. You can read all about those ways in our free report How To Pay For Long-Term Care, which you can download here. For a brief overview on how to pay, keep reading.
The first way to pay for long-term care is through long-term care insurance or life insurance with a chronic illness rider. One of the best ways to pay for long-term care is with some form of insurance policy that provides long term care coverage.
The second way to pay is to pay out of pocket. That means you would spend your assets on your long-term care, paying out of pocket at the “private pay” rates set by the facility. This is the most expensive option, and assets can dwindle very quickly with private pay.
The third option is to position your assets so that you can qualify for Medicaid / Masshealth. Medicaid not only provides coverage for long-term care, but they pay facilities at special rates that are a lot cheaper than private pay rates.
The downside to Medicaid is that it’s possible for Medicaid to put a lien against assets of someone receiving long-term care benefits, and Medicaid collects money back from a benefit recipient's estate upon their passing. Regardless of the drawbacks, the money that Medicaid has paid out is paid out at their discounted rate, as opposed to the private pay rate, making the lien much smaller than if you were to use your own assets and pay monthly at the private-pay rate.
Often times, on paper, people do make too much money and have too many assets. However, through the use of proper estate planning techniques, we can get individuals qualified even if they have more assets than what is allowed by Medicaid. The right estate planning lawyer can position your assets to qualify for Medicaid, even if you’ve got more money and assets than the guidelines allow.
Let’s take a deeper dive into one of those planning tools.
Medicaid Compliant Annuities
We can take a lump sum of money (such as the amount by which that the client exceeds the MassHealth asset limit) and move that cash into a Medicaid compliant annuity.
To determine eligibility, Medicaid / MassHealth looks at assets, and they look at income. These two categories determine the way Medicaid views your financial situation, but they are two distinct categories. If you have assets over that limit, you don’t qualify. But by setting up the annuity and dropping a lump sum of cash into the annuity, what we have done is we've taken a lump sum cash asset and converted it, by putting it into the annuity. The annuity pays out over time, so we've changed it from an asset into an income stream. Now, if we do it right, MassHealth can’t view it as an asset and has to view it as income. We have taken that cash out of the calculation that Medicaid uses to determine your total assets. Medicaid / MassHealth does look at the income, and they use it when calculating the monthly copayment (or as Medicaid calls it a PPA, which stands for Patient Paid Amount).
The advantage with the annuity is that we've gotten the business owner qualified for Medicaid immediately so that Medicaid is paying the facility at their lower Medicaid rate and not the private-pay rate. That way, we get that lump sum cash to last much, much longer. And we have taken someone that would not have qualified for Medicaid because of their assets, spent down their assets by converting into the annuity, and now we've got them under the asset limit to the point where they can qualify.
The best elder law attorneys know how to get this right and comply with the technical rules required. The best attorneys should be licensed for writing annuities, and should even be able to either handle the annuity for you, through a relationship with an insurance company, rather than sending you to an insurance broker.
Warning, these tools are easily misunderstood and mismanaged. Hire an expert, and get it done right.
If you need assistance with your application, we can help! Attorney Michael Monteforte has a 100% success rate on all MassHealth applications. He knows how to get you qualified and save you thousands of dollars. Give us a call at 978-657-7437 to set up your Strategic Planning Session today so you can talk to Michael about your options! You can even book an appointment right online at BookMyPlanningSession.com.