Many persons who must enter a nursing home or long-term care facility in their later years will come to rely on Medicaid for payment of the great bulk of the expenses. However, the rules for qualifying benefits in Texas and elsewhere require that a person have limited assets that are specified. That fact has resulted in the growth of Medicaid planning, which re-structures the assets so that when the time comes to request benefits, the applicant will be qualified.
There are some general principles of Medicaid planning, but the actual rules differ from state to state and from case to case. It is therefore necessary for the elder family member, and his or her adult children where appropriate, to consult with an elder law attorney prior to making any decisions or taking any planning actions. In such a consultation, you can best learn the applicable property exemptions and any legal options available to protect the assets.
Furthermore, family discussions and the meeting with an elder law attorney should take place early, well before retirement if possible. Legal restrictions require that some assets be conveyed by the elder over five years prior to the application for benefits. This is called the five-year "look back" period. With advance planning, the assets may be transferred or restructured to preserve them for passing to one's heirs.
Normally, the applicant would have to wait until the five years transpires before qualifying for Medicaid benefits. However, if the person is already in a facility due to emergency or changed needs, one or more years without coverage can produce an overwhelming bill for most persons. The bill may impact on the heirs in some instances, and may also deprive them of your only substantial assets. With Medicaid planning, however, your elder law attorney can take appropriate actions pursuant to Texas and federal laws that are designed to protect those assets in advance.
Source: fireengineering.com, "Firefighter Finances: The Oft-Ignored Component of Elder Care Planning", Diana Palmieri, Oct. 27, 2014