There’s a right way and a wrong way to do everything, as your mother always told you.
The same holds true in qualifying for Medicaid.
Today I’ll pass on a true story about a client of mine who (with our help, naturally) qualified her husband for Medicaid, while protecting assets and putting herself in a better position, by buying an exempt resource.
(If you don’t know about exempt resources, click here.)
I’ll call her Mrs. Walker. While she was walking across the street after church one evening, a motorist struck her. A period of painful physical therapy ensued, after which Mrs. Walker got around on two canes. The stairs in Mrs. Walker’s house became dreaded obstacles.
Around that time, Mrs. Walker’s husband suddenly – but permanently – required full-time care in a skilled nursing facility to the tune of about $8,000 a month.
We crunched the numbers and found that Mr. and Mrs. Walker owned about $150,000 too much in resources to qualify for Medicaid benefits. But one simple strategy solved two of their problems.
Mrs. Walker sold her old three-story house and combined her proceeds with the couple’s extra $150,000 to buy a newly constructed ranch condo. She loved having everything all on one floor, and Medicaid benefits started paying for the cost of her husband’s care.
So what’s the wrong way to qualify by buying exempt resources? Getting too cute and buying a Porsche with your extra dough is one example. Even if you don’t end up with a denial (and trying to explain the propriety of the purchase to an administrative law judge), you still have the problem of what to do with an asset that depreciates in value rapidly, may require expensive maintenance, and could be subject to Pennsylvania’s estate recovery program.
It’s always best to make sure your Medicaid qualification strategy fits in with your overall circumstances and estate planning goals. It should also make simple common sense.
Finally, keep in mind that when using this strategy to qualify for benefits, timing can be critical. (See example.) It’s best to have professional advice.