Medicaid Planning for Long-Term Care in New Jersey
Learn about Medicaid planning for long-term care in New Jersey. Find out about eligibility, asset protection, and how Wenarsky and Goldstein, LLC can help.
Ensuring Medicaid Eligibility Through Proper Planning
Medicaid is a public health insurance system for low-income individuals in the U.S. It is designed to ensure that essential healthcare services are accessible to those who cannot afford them, including children, pregnant women, elderly adults, and people with disabilities.
Planning is essential to ensure Medicaid eligibility, particularly for long-term care needs, due to the program’s stringent eligibility criteria. Medicaid has asset and income limits that individuals must meet to qualify for benefits. Without proper planning, individuals may risk disqualification due to excessive assets or income.
A Medicaid planning attorney from the Law Offices of Wenarsky and Goldstein, LLC, can help you create a comprehensive Medicaid long-term care plan that protects your assets and ensures your eligibility for Medicaid benefits without having to sell any property.
The Importance of Medicaid Planning for Long-Term Care
As we age, the cost of long-term care can become a significant financial burden. According to the Genworth Cost of Care Survey, the average cost of a semi-private room in a semi-private nursing home in New Jersey is over $11,619 per month. This cost can quickly deplete an individual’s assets, leaving them with limited options for long-term care.
Proper Medicaid planning can help individuals safeguard their assets while still qualifying for much-needed healthcare support. It allows individuals to structure their finances and property in a way that meets Medicaid’s eligibility requirements without having to sell off all their assets or leave their loved ones with overwhelming financial burdens.
What Does Medicaid Planning for Long-Term Care Involve?
Medicaid planning for long-term care involves creating a comprehensive plan that addresses asset protection, income limits, and eligibility requirements. An experienced Medicaid planning attorney can help you navigate the complex rules and regulations of Medicaid to ensure that your assets are protected while still meeting the program’s eligibility criteria.
Some common strategies used in Medicaid planning include:
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Asset Protection Trusts: These trusts allow individuals to transfer their assets into a trust, which is managed by a trustee on their behalf. This strategy can protect assets from being counted towards Medicaid’s asset limit.
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Spousal Transfers: Married couples can transfer assets between each other without penalty to meet Medicaid’s asset limit requirements.
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Gift Planning: Gifting assets to family members or loved ones can also be a strategy to protect assets from being counted towards Medicaid’s asset limit. However, there are strict rules and limitations on gifting, so it is crucial to consult with a Medicaid planning attorney before proceeding with this strategy.
Understanding Medicaid in New Jersey
The public health care insurance program or Medicaid in New Jersey is called NJ FamilyCare. Medicaid offers a variety of medical assistance for different demographics. Pregnant women, adults, and children below 19 are the focus of NJ FamilyCare. However, there are also NJ FamilyCare Aged, Blind, Disabled (ABD) Programs that are specifically designed for older adults and those who are blind or impaired.
For long-term care, New Jersey FamilyCare provides Managed Long Term Services and Supports (MLTSS), a program designed to “expand home and community-based services.” MLTSS is available for individuals of all ages but with different clinical and financial eligibility requirements.
Types of Covered Long-Term Care Services
Medicaid in New Jersey provides the following long-term care services:
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Assisted living
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Community residential services
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Nursing home care
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Trips to hospitals
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Medication management
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Care management, including personal emergency response systems, when applicable
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Home-delivered meals
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Home and vehicle modifications
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Mental health and addiction services and support programs
New Jersey Medicaid Eligibility Requirements
To be eligible for NJ FamilyCare MLTSS, you have to:
- Be a New Jersey resident
- Be a U.S. citizen or a qualified immigrant
- Satisfy specific monthly income requirements
- Meet the clinical eligibility requirements for Nursing Facility level of care
- If you are aged 21 and above, you must require hands on assistance with three or more activities of daily living, such as bathing, dressing, toileting, eating, and bed mobility, or have cognitive deficits that require supervision and cueing with three or more activities of daily living.
- If you are under 20 years old, you must:
- Meet the clinical eligibility requirements listed above or
- Have developmental delays or functional limitations for age-appropriate activities of daily living that necessitate nursing care exceeding routine parenting and meet criteria for medical and/or intense therapeutic services.
Strategies for Medicaid Planning
People considering MLTSS should be aware of the following Medicaid planning strategies in order to become and remain eligible for long-term care benefits:
- Qualified Income Trust (QIT): A Qualified Income Trust, also known as a “Miller Trust,” is a trust used to help individuals with income above Medicaid limits qualify for benefits. It allows excess income to be deposited into the trust, which is then disregarded for Medicaid eligibility purposes.
- Spousal Refusal and Spousal Transfers: Spousal refusal is a strategy where the healthy spouse refuses to contribute their income or assets to the institutionalized spouse’s Medicaid eligibility. Spousal transfers involve legally transferring assets or income between spouses to ensure the community (non-institutionalized) spouse can maintain financial stability while the other spouse qualifies for Medicaid-funded long-term care.
- Medicaid Spend Down: This strategy refers to the process of reducing an individual’s countable assets to meet Medicaid’s asset limits for eligibility. It involves spending excess assets on medical bills, healthcare expenses, or other allowable expenditures to bring assets below the Medicaid threshold and qualify for coverage of long-term care services.
- Medicaid Asset Protection Trust: The irrevocable trust known as a Medicaid Asset Protection Trust (MAPT) shields the assets of a Medicaid applicant from being taken into account when determining their eligibility.
- Life Estate: A life estate is a legal arrangement where an individual (the life tenant) retains the right to use and occupy a property for the duration of their life, after which ownership passes to another party (the remainderman). The property’s worth may then be exempt from Medicaid estate recovery.
- Medicaid Compliant Annuities: A Medicaid Compliant Annuity is a financial tool used in Medicaid planning to convert excess assets into income streams while maintaining Medicaid eligibility. It involves purchasing an annuity that meets specific criteria set forth by Medicaid regulations.
The Application Process
Step 1: Prepare the following documents:
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Proof of identity (passport, birth certificate, driver’s license…)
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Income (Social Security, child support, wages, etc.)
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Assets (trust statements, annuities, bank accounts…)
Step 2: Consult an elder law attorney to verify your eligibility and make any necessary adjustments
Step 3: Contact the local County Area Agency on Aging (AAA) Aging and Disability Resource Connection (ADRC) to be clinically screened. If you are under 20, contact the Division of Disabilities Services (DDS) for information on the next steps.
If you already have Medicaid and want to enroll in MLTSS, you can contact your managed care organization (MCO) to be screened.
Important to Consider: The Look-Back Period
The look-back period refers to the time preceding a Medicaid application, during which any asset transfers or gifts made by the applicant are scrutinized. In New Jersey, the look-back period is five years.
During this time, Medicaid assesses whether any assets were transferred for less than fair market value. If such transfers are discovered, they may trigger penalties, resulting in a period of Medicaid ineligibility known as the penalty period.
The Law Offices of Wenarsky & Goldstein, LLC Can Help.
Medicaid planning is particularly crucial for people with disabilities, but everyone should consider it at some point in life. It’s never too soon to start planning for your or your loved one’s future. Our estate planning lawyer at the Law Offices of Wenarsky & Goldstein, LLC, can help you make the right plans to ensure you get the Medicaid benefits you need.
Contact us today to schedule a consultation on Medicaid planning.
Call the Law Office of Wenarsky & Goldstein
At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.
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