When someone says the word “Medicaid” the common thought that occurs to most Americans is WELFARE, and for the most part, that is true. But if you read this whole story, you’ll see that there is an entitlement program hidden behind the veil of common belief:
Medicaid is the primary government program covering long-term care for Americans. Without it many of us, our parents, grandparents and friends would be without care at the end of life. The system only pays for long-term care when a person is down to $2,000 in assets. Because the cost of home care, assisted living and nursing home care is so high, most people cannot afford to pay without becoming impoverished. After “spending down” to the Medicaid poverty limits, these middle-class and upper-middle-class Americans are now solely reliant on the government dole, having no money left to pay for everything the government will not cover. Because money buys care, these people now struggle to maintain quality care and quality of life.
Entitlement benefits for skilled care are jointly funded by state and federal programs that pay for nursing home care. It has its origins in the social security system.
What we ended up with was a split system. One system pays medical expenses for the poor, called Medicaid, and one system that paid medical expenses for the elderly, called Medicare. Medicare made complex provisions for the limited payment of care in a nursing home. It was left to Medicaid to pay for nursing home care.
Under the original Medicaid program seniors would impoverish themselves, basically going on welfare to get the care they needed. Some spouses, in desperation, would divorce simply to get access to benefits. Assets would be exhausted and spent down to nothing. Life savings would be wiped out, paying for nursing home care until finally the government would step in with some assistance. This “solution” often created more problems and required the person, usually an elderly individual, to reach poverty levels in order to be eligible for help.
Recognizing that perhaps this was not the best way to take care of our aging population, President Reagan changed the federal law in 1986 in order to reduce the burden on our seniors and to keep them from impoverishing themselves. This metamorphosis in the Medicaid law established new criteria to determine eligibility for public benefits. The new changes increased the amount of assets a person could keep and still be eligible for Medicaid assistance to pay for care, eased restrictions on transfers and implemented new protections for the spouse of the Medicaid applicant. It was at this point that Medicaid effectively changed from a program focused on the poor to much more of a middle class entitlement program more akin to Medicare.
Many people still believe that the Medicaid program is welfare; quite simply it is not. While Medicaid’s beginnings originate from a poverty program, nursing home Medicaid has evolved into our country’s answer, for good or bad, to the pressing social problem that care in a nursing home presents.
The Medicaid law in 1986 was quite broad in its application. Since then there have been repeated changes in the law to limit and reduce access to Medicaid. There has been a steady swing of the legislative pendulum toward more and more restrictive rules designed to disqualify more and more people from accessing Medicaid benefits. The greatest swing recently took place with the enactment of the changes to Medicaid contained within new federal legislation referred to as the Deficit Reduction Act of 2005.
All the changes over time have created the convoluted legal structure that we use to determine eligibility for Medicaid benefits. Qualifying for benefits is not as easy as “Let’s see your bank statement, okay, you’re under the limits… you get benefits.” Instead, there are look-back periods of three and five years, income caps and income trusts to get around these caps, transfer penalties and waiting periods, disqualifying transfers, exempt transfers, good trusts and bad trusts, different rules for spouses and single applicants, even an asset is not an asset; it is either countable or not countable depending on individual circumstances. For those of you familiar with the nonsensical story of Alice in Wonderland, when dealing with Medicaid, you have gone down the rabbit hole and nothing is ever as it seems.
Long-term nursing home care is expensive in California, averaging from $6,000 to $11,000 or more PER MONTH! More often than not, the family does not have sufficient income to pay for the ongoing cost of care and goes into what we call a negative cash flow situation. This means that there is a steady and rapid depletion of the family’s assets as they are used up to meet the shortfall in income. The loss of assets is further accelerated and compounded if there is a spouse in the picture who is trying to maintain a life outside the nursing home. When the other spouse is still trying to survive at home, in the community, he or she has to maintain the home, pay everyday expenses as well as pay the added expense of the nursing home.
The rapid drain on the family’s resources produces a bleak outcome. Complete depletion of assets, insufficient income to maintain the spouse still at home, and little or no inheritance to pass on to the children.
Can You Protect Assets and Still Qualify for These Skilled Care Nursing Home Entitlement Benefits?
The answer is yes. But it is not a simple task – for either the average citizen or seasoned attorney – of merely filing an application. We have a 100% success rate, and we have helped over 2,000 individuals during the past 10 years secure their entitlement benefits – having their skilled nursing home costs paid by the government – and protecting their assets for themselves and their family. Give us a call today to discuss your situation and ask us your questions. You are under no obligation and our consultation is free. We offer a 100% money-back guarantee on our service fee.