Those that have followed or are planning on following the age old advice of hiding assets along with income to qualify for Medicaid in order to receive “free Long-Term Care” may want to sit down and read the fine print to the actual rules of Medicaid.
Things have surprisingly changed and what you don’t know will not only hurt you, but also others or more specifically your children.
According to the U.S. Department of Health and Human Services, Medicaid, since 1965, has given the states permission to impose liens on property in the estates of deceased Medicaid recipients in order to recover the expenses.
This permission has come with the caveat that each state has the option of how they would like to recover those assets and at what time they would like to start the recovery process as well, but back in 1993 things changed a little bit more with the Estate Recovery Mandate.
With the creation of this mandate each state, under rule of the Act, now has an obligation to try to recover the costs relating to any:
- Nursing Care or LTC facilities
- Expenses accruing for medical services while residing in a nursing facility
- Other items that were covered by the Medicaid Plan.
Again, each state still, even today, has the option of how and when they will go about implementing the recovery process and for some states, at least 29 of them, they have figured out how to get around that aged old advice of hiding assets to qualify for care that you have been told about.
How? Welcome to the Filial Support Laws that have been enacted by 29 states, under this law each state that has implemented it, now has the ability to try to recover the expenses of Medicaid from the children of the recipients of care.
Think it can happen? Think again.
John Pittas of Pennsylvania was personally hit with a bill for over $93,000 for his mother’s Medicaid expenses even though he also had other siblings that could help pay the debt. The reason why he was singled out: again, the states have the options of how and when they will implement this Estate Recovery Mandate.
So, still not planning for Long-Term Care, your financial advisor still telling you to just self fund or are you still thinking that you can just trust away the problem? Again, THINK AGAIN.
The loopholes are being covered and the people that will be affected by this will be your children. With 76 million people heading to retirement, the burden to tend to their care will be increased to levels we as a Nation have never experienced, how are we going to fund this?
For some states, those 29 with Filial Support Laws, they have figured it out: pass the bill on to the next generation, which may just happen to be your own children and for those other states who have yet to implement this law, well, the rules will probably change there too.
The real frustration around this whole subject is not the burdensome cost, or the unhappy conversation about the subject matter or even the lack of attention being paid to it, it just happens to be the simple fact that, for those that have studied this problem, is how simple the solution for this “crisis” really is.
Planning to cover this expense along with all of the other costs associated with your health can be addressed with very little heavy lifting, in fact it has never been easier.
Thanks to new financial products and investments there are now multiple ways to solve this issue, everything from using the leverage of specific types Life Insurance or certain Annuities that have riders along with them, to hybrid products from firms like Lincoln Financial, One America and Pacific Life and even certain investments, though not guaranteed can be used to help offset this cost.
All that one really needs to do is work with a financial professional who understands how ALL healthcare costs will impact a financial plan and then implement the strategy. After that, this issue of LTC along with the other costs associated with your health will be taken care of.
The only real hard part of all of this …….finding a financial professional who understands how YOUR HEALTH will impact YOUR FAMILY.