“Medical Assistance – Understanding Alternatives to Private Long-Term Care Insurance.”

There’s A Reason They Call It Estate PLANNING.  Let’s just focus on long-term care (LTC) costs.  Private LTC costs can easily exceed $7,000/monthly depending on your needs and the type of facility you’re accessing.  If you are like many people who haven’t been able to qualify for LTC Insurance, you may be burying your head in the sand in frustration or horror at the thought of how you, your spouse, and/or your family will pay for extended care for yourself or your loved ones.  Obviously, if LTC Insurance is an option for you, in most cases, it’s a good idea. But, for those who are unable to qualify for it, or for whom it’s cost prohibitive, understanding how to plan for public LTC is just as important.

For self-starters:   First, you should know the applicable Minnesota Law on the subject:  Minnesota Statutes Chapter 256B.  You can access those laws directly and easily on your own, or ask a professional to assist you with understanding the law. Second, you should know what the Minnesota Department of Human Services (DHS) says about administering the medical assistance (MA) program by consulting the Health Care Programs Manual (one specific to the county in which you reside). This can be accessed at http://www.dhs.state.mn.us.

For those who would like professional assistance:   Contact a professional(s) who will assist you in making a comprehensive Estate Plan for you and your family that may include, among other things, a plan for your long-term care needs and concerns.

Minnesota’s MA in a Nutshell:

You must qualify financially and physically in order to become eligible to receive MA. The physical qualifications are fairly obvious:  you have to be 65 or older, blind, or disabled, and you must need help with some or all of your physical care (there are varying levels of assistance programs depending on the nature of your needs).  The financial qualifications aren’t that different:  you have to need help with covering your expenses – for MA, that means that you pay for your own care until you have no more than $3,000 left of what are called “available” assets (there are some assets that are “unavailable” and some that are “excluded” as assets – for more information, consult the manual or DHS website).

If you’re single, that’s pretty scary. But, if you understand the importance of advance planning, you may have more control than you think.  If you’re married, you need to understand what that means for your spouse. There are some important financial protections for your spouse if they need to go on living without MA while you need to access MA (like the “Community Spouse” designation). But, like everything else, if you stick your head in the sand and don’t understand how to plan for that event, you may miss the opportunities the State offers you to plan ahead and protect your spouse. If you or your surviving spouse just want to leave something for your children or grandchildren, again, if you plan ahead, you may have options.  If you don’t plan ahead, the State puts you on its financial conveyor belt in order to spend all of your available assets before it starts footing the bill.  And, even if some of your assets are not available for your care during your life-time, the State may still be able to put a lien on your assets after you’ve passed away to recover part or all of their costs for your long-term care needs.

The five-year “look-back” period:

This is the main reason planning ahead is so important. If you are thinking that you would like to protect some of your assets by transferring them to someone or something, there is a “look-back” period that disqualifies some of those transfers if you transfer your assets within 60 months (5 years) of needing MA.  If you transfer assets and fail to reach this threshold, there is a strong presumption, very difficult to overcome, that you transferred this asset to “hide it” from the State. You then make yourself ineligible for MA to the extent that you fell short of this 60 month deadline.

As you can see, since few people know when they will be in need of long-term care assistance, the longer you wait to think about and plan for it, the more you risk in terms of options you might wish to exercise.

Estate Planning is not just for wealthy people.  It’s for all people who want to understand what options they may have in their future and what they can do to plan for and control those options.

ALL READERS:  This blog is not, nor shall it be deemed to be, legal advice or counsel. This blog does not create an attorney-client relationship with any reader.  It is designed to encourage thoughtful consideration of important legal issues with the expectation that readers will seek professional advice from a licensed attorney.