Do you have a Medicaid plan? For many people, the answer to this question is a definite no. In fact, a great number of people do not even know what a Medicaid plan is. If you are one of those people, then you need to be aware that you are at risk of financial loss. 
While making a Medicaid plan may not be on your to-do-list, here are three big reasons why it should be.
1. Anyone can become incapacitated and need nursing home care
The first and most important reason to make a Medicaid plan is because Medicaid planning helps you to prepare for the possibility that you are going to need nursing home care at some point in your life. Preparing for this possibility is absolutely essential because anyone could possibly need nursing care. In fact, once you reach the age of 65, it’s actually more likely than not that you are going to need to either move into a nursing home or have a home health care aide come to you to help you.
This comes from the Genworth Cost of Care Survey, which revealed that 7 in 10 people 65 and older require nursing home care at some point during the remainder of their lives. Most often, this is custodial care, because people simply get old and sick and they stop being able to do routine activities of daily living.
Medicaid planning ensures that when you need nursing home care or help from a home health aide, that you can pay for it. See, private health insurance is not going to pay for nursing home care and Medicare is also not going to provide coverage for it except in very limited circumstances like when you need rehab after leaving the hospital or need bandages changed after a surgery that you have in a hospital.
Outside of these situations, you would be left to cover the costs entirely on your own — unless you had a Medicaid plan in place to ensure you could qualify for Medicaid to cover your nursing home costs.
2. Nursing home care is really expensive
The second reason that you need a Medicaid plan is because nursing home care is very expensive. According to the Genworth Cost of Care Survey, the average monthly cost of a semi-private room in a nursing home is $8,669 per month. This is a huge monthly fee to pay. If you want to be in a private room instead of sharing a room with someone else, you are looking at an even bigger bill. The average monthly cost comes to $9,733 which is astronomically expensive.
Now, Medicaid pays for this — but only if you have spent down your assets. In other words, you need to spend your own money first on nursing home services before Medicaid starts to pick up any of the bills. Medicaid is a means-tested benefit designed for people with limited incomes and few financial resources, so unless you have burned through your assets paying nursing home bills, you won’t be able to take advantage of their nursing home coverage.
Many people don’t want all of their money and property to go towards covering Medicare services since this would leave them with nothing to leave to their loved ones. It would destroy their chances of being able to leave a legacy — unless they had put a Medicaid plan in place to cover nursing home services without them losing their money and property first.
This is the big reason why you need to make a Medicaid plan. So you can get government benefits to pay for expensive nursing services and still keep all that you have worked hard for.
3. A Medicaid plan needs to be made well in advance of the time that something happens to you
Finally, the reason why you absolutely cannot wait to make a Medicaid plan is because there is a five-year lookback period. If you need to apply for Medicaid to cover the cost of your nursing home, Medicaid is going to look back at money transfers and asset transfers that you have made over the past five years. If you gave away assets or if you sold money or property for less than the fair market value of what it is worth, this can result in you becoming temporarily disqualified from being able to get Medicaid benefits.
If this happens to you, you are going to find yourself in a situation where you can’t afford to pay for your nursing home. You don’t want that to be your fate, so you need to make your Medicaid plan at least five years prior to the time when you could potentially need to move into a nursing home.
The problem is that no one knows, or can reliably predict, when they are going to need to move into a nursing home. This could happen very suddenly, especially as you start aging and you get to the point where something like a stroke could happen at any time and leave you unable to care for yourself without being in a home or having home care.
For that reason, it is critical that you put a Medicaid plan in place ASAP. This will maximize the chance that at least five years pass until you need nursing home care so you’ll be able to qualify for it right away when you need it
The Law Offices of James A. Miller, P.C. is here to help you make your Medicaid plan. Give us a call today at (508) 799-8885 or contact us online to speak with a Worcester, MA estate planning lawyer who can help you with the Medicaid planning process. That way, if the time comes for you to go into a nursing home, you’ll have the peace of mind of knowing you can do it without losing your legacy.