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Long-Term Care Insurance and Medicaid Planning
- January 24th, 2013
While in large part people who purchase long-term care insurance and those who plan to qualify for Medicaid coverage of long-term care costs fall into separate groups, there are at least two situations where they overlap.
The first group is seniors who cannot afford to purchase lifetime long-term care insurance coverage. These individuals may want to purchase long-term care insurance coverage for five years. They may then transfer assets to family members or to a trust, keeping enough funds so that with the long-term care insurance benefit they can pay for their care for the subsequent five years. After five years have passed, the Medicaid look-back period for asset transfers will have passed, permitting them to be eligible for Medicaid coverage if their other assets have been spent down to the appropriate limit.
Local Elder Law Attorneys in Ashburn, VA
Ron M. Landsman, P.A.
Ron M. Landsman has been practicing elder law since 1983, before it was known as elder law, originally with Landsman and Laster, Washington, D.C., then Landsman, Eakes and Laster, also in Arlington, VA, and since 1990 in his own practice in Montgomery County, Maryland. He has been among the most active members of the...
Hale Ball Carlson Baumgartner Murphy PLC
Jean Galloway Ball is certified in Elder Law by the National Elder Law Foundation. She is a 1977 honors graduate of the National Law Center, George Washington University, and she did her undergraduate work at the University of California at Berkeley, graduating Phi Beta Kappa in 1971. She is admitted to practice in Vir...
Needham Mitnick & Pollack, PLC
Judith Mtinick is well known for acting as a guardian, conservator, trustee or agent on behalf of clients or by court appointment. This experience gives her a wide perspective and extensive practical knowledge that she uses when advising clients in drafting their planning documents. Her experience, as a court appointed...
The second group is seniors who are healthy and wish to transfer assets now, but who don't have enough funds to cover five years of care if they had a stroke or other adverse medical event soon after the transfer. These seniors could purchase long-term care insurance to cover the five-year period after the transfer. They may not have enough funds or income to pay the premiums indefinitely, but are able to do so for five years, at the end of which they can decide whether to continue the policy, perhaps with the assistance of children.
For example, suppose a senior owns a home that she wants to protect, but little else. She could protect the home by transferring it into an irrevocable trust. She would then purchase long-term care insurance and hold the policy for five years as she waits out Medicaid’s look-back period. If, for instance, the premiums on the policy are $5,000 a year and the house is worth $500,000, $25,000 is a very reasonable price to pay to protect $500,000.
Last Modified: 01/24/2013