Determining Whether to Begin Long-Term Care Planning

There are several factors to consider in determining whether to begin Long-Term Care Planning. Let’s discuss them here.

Health:  If an individual is in the hospital or in a rehabilitation center, you should certainly have a consultation with an attorney regarding your options.  Also, if an individual has a progressive illness, such as dementia, MS, Macular degeneration, COPD, ALS, you should also immediately seek the advice of an attorney.

Changes in the Law:  VA Law is federal, however, Medicaid Law is state and federal.  Florida has some of the most advantageous laws in the United States for Long-Term Care Planning.  As the Baby Boomers age, the government has increased its focus on eliminating legal loopholes in the laws which affect Long-Term Care Planning.  Usually, new laws apply prospectively.  Therefore, sometimes it is best to act in advance of an emergent need in hopes of being “grandfathered” into an existing law.

Assets:  There is no specific amount of assets that qualifies you or disqualifies you for from potentially Long-Term Care Planning.  Unfortunately, many people believe that they cannot qualify for Medicaid benefits because they have too many assets.  This simply is not the case.  Under the current law, nearly everyone could possibly qualify to receive Long-Term Care benefits through Medicaid.  That said, not everyone should attempt to qualify for Medicaid as it may not be appropriate.  The best test to initially determine whether to potentially consider Long-Term Care Planning is to apply the following formula:

ESTIMATED COST OF CARE PER MONTH, PLUS THE COST OF ALL OTHER FINANCIAL OBLIGATIONS, LESS INCOME FROM ALL SOURCES PER MONTH, EQUALS THE NET MONTHLY CASH FLOW (POSITIVE OR NEGATIVE).  IF IT IS NEGATIVE, TAKE THIS FIGURE AND MULTIPLY IT BY THE LIFE EXPECTANCY BASED ON A MORTALITY TABLE, THEN DIVIDE THIS FIGURE BY THE TOTAL VALUE OF ALL ASSETS.

If the figure is 20% or more of the total assets, you may want to consider Long-Term Care Planning.

Income: There is no amount of income that disqualifies you from being eligible to receive Medicaid benefits.  If the applicant’s gross monthly income exceeds the amount of the current income cap for the State of Florida ($2,163.00 gross per month as of October 2014), then a Qualified Income Only Trust must be established and funded to obtain Medicaid eligibility.  If an individual is receiving Medicaid benefits from Medicaid’s Home and Community Based Care Program, there is no patient responsibility owed (you keep all of your income).  (If you are in an Assisted Living Facility or a Nursing Home on Medicaid, you basically lose all of your income, except a small amount) to pay the facility.  There is a whole in the Medicaid Program for the Assisted Living Program.  Even while on Medicaid in an Assisted Living Facility there is still minimum amount that must be paid to the facility as a patient responsibility regardless of your income.  This is not the case for Medicaid’s Nursing Home Program.  If you are in a nursing home on Medicaid, you get to keep $109 per month as a Personal Needs Allowance and enough to pay any health insurance premium.  There is no minimum amount you must pay the nursing home as patient responsibility if you are on Medicaid.