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Why Medicaid Planning Is Fair Game

Researchers at George Mason University report that nearly 80 percent of all nondisabled elderly Medicaid recipients have income and resources above the poverty line and that half of this group is over 200 percent above the poverty line. Critics of Medicaid planning strategies argue that it is unfair for wealthy seniors to distribute their income and assets to their heirs to qualify for nursing home Medicaid, funding their children's inheritances while the state's taxpayers fund their healthcare.

However, both federal and state laws provide measures for anyone applying for Medicaid to protect family assets:

Nursing home care is expensive

The fact is that Medicaid planning is both legal and fair. Long-term care and nursing home care can be expensive. In Florida, the average daily cost of nursing home care in a semi-private room is $223 per day, or nearly $81,395 annually. These costs can consume your income and assets in a very short period of time. This could leave your spouse and other dependents without the resources they need to care for themselves.

Ineligibility period applies to everyone

The Medicaid eligibility rules apply to everyone. All applicants are subject to the five-year look-back period to ensure that they don't take advantage of the system. This means that if you make a gift or otherwise transfer assets right before applying for Medicaid, you may be ineligible to receive benefits for a certain period of time known as the penalty period.

Planning ahead can protect your family

Gifts made prior to the look-back period do not affect your eligibility for Medicaid. Therefore, if you have more resources than the allowable limit for Medicaid benefits, you can plan ahead to avoid disqualification. Some of your assets, such as your family home, may fall under an exemption. In addition, you may set up a Medicaid trust specifically designed to ensure certain assets are not part of the eligibility calculation.

A qualified Tampa Bay estate planning attorney can help you plan for your Medicaid and long-term care needs.

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