The last great change in Nursing Home Medicaid planning came in 2005, with the Deficit Reduction Act.  That law changed the Medicaid Look Back period from 3 years to 5 years for all financial transactions. I foresee the next great change coming soon.

One of the primary topics of focus of our “Protect Your Home and Life Savings” workshops over the last 5 years has been ending procrastination.  In fact, we give attendees a free appointment so that they can get started.  We  have been warning people about the perils of waiting to plan.  We encourage clients to be proactive, and to do their asset protection planning now, so that their assets fall under Medicaid’s current five year “Look Back” rule.  That way, they don’t have to worry about inevitable future changes in the law; changes which are seemingly never be for the benefit of the middle class.

Our world, our country, our communities and our families find ourselves in the midst of a century defining event:  one that no one could have prepared for or prevented.

Unemployment has soared to record numbers in record time. Business are closing, many of which will never re-open.  Our health care systems are stretched beyond capacity. First responders will soon be sent from their homes to far away communities to help the most impacted areas.  In some areas our military have been mobilized to assist.  This will cost hundreds of millions, if not billions, of dollars

In response to the crisis, our governments, at all levels, are borrowing trillions of dollars to try to stave off a depression.   The most recent federal spending bill cost $2,000,000,000,000.  Another spending bill of $2,000,000,000,000 ( for infrastructure) has been floated.  I think that it is inevitable that this will pass in some form or another.  We are headed for a recession, at a minimum.  Whether we can borrow fast enough to stave off a depression remains to be seen.

As of that were not enough, we are in an election year.  The pressure to spend our way out of this before November will be immense.

The natural response to such an increase in debt is an attempt to raise revenues and trim costs in other areas.

One area that governments (Federal and State alike) are always trying cut is Medicaid.  However, there will always be a base level of Medicaid spending needed for our uninsured and poorer citizens. The spending cannot go below that level.  Therefore, everything else is at risk.

The easiest place to decrease Medicaid expenditures is to reduce or slow spending for Long Term Care benefits for senior citizens.  The quickest way to do that is to extend the Medicaid Look Back period.  This will necessarily reduce the number of people admitted to Nursing Home admissions who will be initially eligible for Medicaid.  If they are not eligible, the will have to pay for long term care from their private funds. (With the current daily nursing home rates in central New York running at about $400.00 per day, that is a life time of savings that will be spent in a very short period of time. )

My bold and scary prediction:  hidden somewhere in the next few spending bills will be an increase in the length of the 5 year Medicaid Look Back period. It will likely be extended to between 7-10 years. (In fact, a 10 year Look Back period was proposed around 2013.).

It is also likely that the current ability to have Medicaid pay for nursing home care retroactively up to 3 months, will be gone.  (This was previously proposed by President Trump, but was removed from the budget.)  This change will mean that those admitted to Nursing Admissions will need to pay for the first month of care, at least, unless their assets are positioned to be Medicaid eligible already.

People who have already prepared with us are grandfathered into the 5 year rule and are Medicaid ready, should they enter a Nursing Home.

If you haven’t planned, the current time provides you with a brief window get your asset protection planning done, while the current 5 year Look Back rule is in place.  You will be grandfathered in to the current law.

Protect your home and life savings now, remotely, from the comfort and safety of your own home.