Like many people, you may go your entire working life without ever needing to apply for Medicaid benefits thanks to employer sponsored or other private health insurance. That could all change, however, during your retirement years when the likelihood of needing long-term care increases dramatically. The high cost of that care may, in turn, leave you with no other choice than to turn to Medicaid for help. The problem, however, is that qualifying for North Dakota Medicaid can be difficult because of the low income and asset limits imposed by the program. Unless you have planned ahead by including Medicaid planning in your overall estate plan you could find yourself faced with the possibility of having to use your hard-earned assets first before Medicaid will start helping with expenses. The key, therefore, to preventing that from happening is to incorporate Medicaid planning into your estate plan early on in your life.
The Need for Long-Term Care
As you age, the odds of needing to spend time in a long-term care facility increase dramatically. During your working years you have a 20 percent chance that you will suffer and injury or illness that requires long-term care. At age 65, those odds jump to about a 50 percent chance and if you are still alive at age 85 you stand a 75 percent chance of having to spend time in a long-term care facility before you die. If you are married, your spouse is looking at the same odds, meaning there is a very good chance that one of you will be faced with the need for long-term care at some point down the road.
The High Cost of Long-Term Care
Long-term care costs are high – often much higher than people realize. Nationwide, the average cost of a year stay in a long-term care facility runs over $80,000 – and continues to increase. The average length of stay runs 2.5 years. Long-term care costs in the State of North Dakota are actually higher than the national average, running around $100,000 per year for a semi-private room and almost $105,000 per year for a private room. If you are forced to pay out of pocket, the expenses associated with long-term care can quickly deplete a lifetime’s worth of hard work and saving.
The Need for Medicaid
Don’t count on your private or employer sponsored health care policy to cover the costs of long-term care. First, most employer sponsored health insurance terminates when you reach retirement age. Second, even if your coverage continues, or you have additional coverage from a private plan, the odds are that long-term care costs are not covered unless you purchased a separate – and usually expensive – long-term care rider. Medicare won’t help either as Medicare only covers long-term care costs following a hospital stay and then only for a short period of time – 100 days or less. The good news, however, is that Medicaid does cover long-term care costs for those who qualify for benefits.
Qualifying for Medicaid in North Dakota
Qualifying for Medicaid benefits, however, can be tricky because of the income and asset limits. Because Medicaid is a “needs based” federal health insurance program there are both income and assets limits. Your monthly income may not exceed the program limit; however, with “countable resources” limits as low as $3,000 for a senior applicant ($6,000 for a senior couple) in North Dakota, the value of your assets may exceed the program limit.
Simply transferring assets out of your name when you realize you need to qualify for Medicaid is not an option because the program also uses a five year “look-back” period. In essence, this means that when you apply for Medicaid benefits your finances will be scrutinized for the five year period leading up to your application. Any asset transfers made during that period will likely be disallowed and the value of the asset transferred will be imputed back into your estate.
The solution is to include Medicaid planning in your comprehensive estate plan early on in your life – long before you actually need to qualify for benefits. Medicaid planning uses perfectly legal strategies and tools aimed at protecting your assets while ensuring that you will qualify for Medicaid benefits should the need arise down the road.
For more information, please join us for one of our upcoming free seminars. If you have additional questions about Medicaid planning in the State of North Dakota please contact the experienced estate planning attorneys at German Law by calling 701-738-0060 to schedule an appointment.