What is Medicaid?
Medicaid is a joint state-federal entitlement program that serves several purposes, one of them being paying for the long term care (nursing home, etc.) of elderly who cannot afford such care. In Pennsylvania, Medicaid is called Medical Assistance (MA). Nursing homes cost anywhere from $80,000 to over $100,000 per year depending on the facility.
It is more difficult to qualify for Medicaid today due to the five year look-back period. You cannot make transfers or gift away your estate within five years of applying for Medicaid, otherwise a penalty period will occur that will prevent you from receiving Medicaid for a certain period of time.
Yet still, there are strategies and methods available to middle-class families to effectively qualify for Medicaid without entirely spending down an estate.
What is Estate Recovery?
Estate Recovery is the process of the state attempting to recover the cost of paying for long term care. After a person dies, if there are assets available in that person’s probate estate, the state could potentially seek recovery from those funds.
Pennsylvania has been one of the states that has limited the scope of estate recovery. If you’re married, jointly owned property (i.e., a house) with your spouse was not subject to estate recovery. Yet, federal laws allow Pennsylvania to recover from joint assets like real estate. Pennsylvania resisted putting in place a more expansive estate recovery law with such provisions.
But, state budgets are still hurting, and states across the nation are looking at ways to make cuts. One possible way to bring in more money is to expand estate recovery. In fact, the Pennsylvania legislature recently passed a law allowing the Department of Public Welfare, the agency that oversees the PA Medical Assistance program, to impose new regulations such as more stringent estate recovery rules without any oversight. If new regulations such as expanded estate recovery were to be imposed, it could cause problems for many people. We will keep you updated on the matter. Right now, there are many attorneys across the state working together to urge the governor and legislature to repeal the law granting the agency expansive powers.
How Should You Plan For Long Term Care?
It is important that you speak with a qualified attorney who can help you plan for long term care costs. There are many strategies and techniques an attorney can employ, depending on you situation and your goals. The earlier you begin planning, the better.