Currently in Arkansas there are over 17,000 individuals residing in a nursing home (also known as a skill-nursing facility). Medicaid is a need-based, joint federal-state program that provides health insurance coverage to low-income children, seniors, and people with disabilities. In addition, it covers care in a nursing home for those who qualify. Often our clients are surprised to learn that Medicare will only cover 20 to 100 days of “skilled nursing” care.
In the absence of any other public program covering long-term care, Medicaid has become the default nursing home insurance of the middle class. Nearly, seventy percent (70%) of nursing home residents are on Medicaid. Lacking access to alternatives such as paying privately or being covered by a long-term care insurance policy, most people pay out of their own pockets for long-term care until they become eligible for Medicaid.
As for home care (which can average over $12,000 per month), Medicaid has traditionally offered very little — except in New York, which provides home care to all Medicaid recipients who need it. Recognizing that home care costs far less than nursing home care, more and more states are providing Medicaid-covered services to those who remain in their homes.
Although their names are confusingly alike, Medicaid and Medicare are quite different programs. For one thing, all retirees who receive Social Security benefits also receive Medicare as their health insurance. Medicare is an “entitlement” program. Medicaid, on the other hand, is a form of welfare — or at least that’s how it began. So to be eligible for Medicaid, you must become “impoverished” under the program’s guidelines.
Also, unlike Medicare, which is totally federal, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.) This complicates matters, since the Medicaid eligibility rules are somewhat different from state to state and they keep changing. This most recently occurred with the passage of the Deficit Reduction Act of 2005 (the DRA), which significantly changed rules governing the treatment of asset transfers and homes of nursing home residents. To be certain of your rights, consult our team. We’d be happy to guide you through the complicated rules of the different programs and help you plan ahead.
Estate planning is one legal service that everyone needs. It is a large part of elder law, but as you age, it is important to have an attorney that understands how to protect assets from financial mismanagement and from long-term care costs that can devastate your estate. Put another way, if you go broke in a nursing home, there is not really the need for an estate plan. We understand this and the importance of planning and leaving something for your child and children’s child. Our firm can create a customized plan to not only protect you but also your spouse in the event of nursing home care.
John Smith and Jane Smith of Cabot, Arkansas currently have a home, rental property in Jacksonville, Arkansas, and $40,000 in CD’s. After speaking with the Admissions Director and Director of Finance for John’s placement in a nursing home, they were told they needed to sell their rental ($60,000), and then spent down the $100,000 in liquid assets. Their son, who is a financial advisor in Little Rock, sought out an elder law attorney for a second opinion. After speaking with the attorney, he advised keeping the rental property; allocating $25,728 as the minimum community spouse resource allowance (CSRA), spend $7,000 for one month of the nursing home, and then spend the remainder on qualified repairs to the home. This elder law attorney was able to protect their assets and provide greater financial help for the wife.