Applying for Medicaid is not for the faint of heart, and the level of care covered by Medicaid may be far lower than what most middle-class Americans have come to expect.
People put off thinking about or planning to apply for Medicaid because there is nothing pleasant about it, from coming to terms with being ill and impoverished to sharing a nursing home room with a stranger, according to USA Today in "Navigating Medicaid for elder care can be as painful as the ailments." Depending on the policies of your state, you may not be able to spend your final days or years at home.
Up to 30% of Medicaid funding covers long-term care, which is roughly $100 billion annually. More than two-thirds of older adults will require some personal assistance before they pass away, and nearly 50% will need care to such a level that they'd be eligible for private long-term care insurance or Medicaid.
If you want to explore sheltering assets so you can qualify for Medicaid sooner rather than later, then you should talk to a qualified Medicaid attorney. You don't want to be without expert counsel, especially when making hard decisions on how to allocate money you've saved all your life.
A year of nursing home care can run upwards of $90,000, which means savings are going to run out quickly. Some folks start to transfer assets to their children earlier so they can have an inheritance. These transfers may be subject to a "clawback" or forfeiture if they happen within the five years before the elderly parent's application for Medicaid.
Medicaid is governed by both state and federal laws, so there are some variations depending where you live as to what it covers and what you can keep.
Applying for Medicaid benefits is a complex task that requires the help of an experienced elder law attorney. Families need to be involved with their spouses or parent's finances and medical records, which can be voluminous. Like many of the issues concerning severe illness or end of life care, it is best to have a plan in place, discuss the situation with the family and with the help of an elder law attorney.
Reference: USA Today (March 26, 2016) "Navigating Medicaid for elder care can be as painful as the ailments"