Longer lives have brought Americans a new challenge—how to pay for medical care and complex health needs well into our seventies, eighties, nineties, and beyond.

Nursing home residence costs an average of $9,700 per month for a private room. Even if you live independently, you will still face mounting costs for regular medications and assistance in your home. In-home health aides are less expensive, beginning at around $3,000 a month, but still considerable.

This is why working with an estate planning attorney well in advance is crucial. In the future, you may need Medicaid to pay for your nursing home or in-home care, but in order to qualify, you cannot possess assets or have income above a certain level. That level differs by state. An experienced Georgia estate planning attorney can help you protect your assets from Medicaid, preserving your home and resources for yourself and your family.

Without an asset protection plan, you may not qualify for Medicaid. Even if you do, the government could have the right to recover money and property from your estate once you are gone.

How Medicaid Laws Prevent Enrollment

Medicaid is a federal program, but each state government administers Medicaid separately, and key laws or regulations can differ between them. Asset and resource limits differ between states. These determine who is eligible to receive Medicaid, depending on their age and status. For example, in Georgia, the 2023 limits stated that “aged, blind or disabled” people in need of nursing home care or in-home community care could possess no more than:

  • A monthly income of $2,742
  • An annual income of $32,904
  • Resources of $2,000 for an individual or $3,000 for a married couple

(Amounts increase yearly on an incremental basis. See Georgia’s Medicaid site for further information.)

Since many people above these limits still cannot pay for the care they need, they will need to plan ahead to qualify for Medicaid. Simply giving away the assets will not work. Medicaid has a “look-back” period of 60 months (5 years). Any assets given away or sold for less than fair market value during that time can be counted. There are many ways to accidentally violate this rule, and doing so results in a penalty period—extra time to wait before Medicaid becomes available.

Without awareness and planning well in advance, these rules can easily catch people who desperately need help. However, planners and attorneys know how to look ahead and use exceptions and exemptions to make Medicaid possible.

Securing Medicaid Eligibility

Exemptions and Exceptions for Medicaid Eligibility

The law provides some protections for spouses who are not applying for Medicaid and for disabled children, as well as assets not considered “countable” for income. These include:

  • An IRA or 401(k) in “payout status” is not countable.
  • A spouse not applying for Medicaid may retain up to $154,140 in assets not counted towards their spouse’s eligibility, if their spouse is a senior.
  • A married applicant’s home does not count against eligibility so long as a spouse lives there.
  • If an unmarried applicant remains in their home or intends to return there, the home equity value will not be counted against eligibility unless it is $713,000 or over.
  • Transferring a home to a child who is disabled, under 21, or acting as a caregiver does not violate the look-back period.
    There are many loopholes even within the loopholes, and it is essential to remain up to date on regulations and how they change each year.

The Medicaid Spend Down

Those with assets over the limit may need to engage in a “spend down,” investing their countable assets into uncountable assets or other expenditures that do not violate the look-back rule. Many states have a set of rules to assist elderly and disabled people in this situation,

called a medically needy pathway (MNP). In Georgia, this category is called Aged, Blind, and Disabled Medically Needy (ANM). ANM individuals can count qualifying medical expenses for themselves and certain immediate family members against their excess income.

Qualified Income Trusts

When an applicant receives too much monthly income for Medicaid, a qualified income trust (QIT), also called a Miller trust, retains assets so that they do not count as income for Medicaid’s purposes. In Georgia, Miller trusts need state approval for this purpose.

Avoiding Medicaid Estate Recovery

After the death of a Medicaid member, the state has the right to pursue repayment for its medical assistance by making a claim on the member’s estate. This is called the Medicaid Estate Recovery Program, or MERP, and what it can do varies by state law.

In Georgia, the state will not pursue recovery if the member left an estate valued at $25,000 or less. However, Georgia also has a broader definition of “estate” than some other states, and it applies to trusts and other financial instruments that are not part of a legal probate estate.

This includes homes that pass automatically to another person after death by joint tenancy, which many married couples have. They may also place a lien on a home if the member is considered “permanently institutionalized” in a nursing home and unlikely to return.

Planning well in advance will help your family avoid extra heartache and loss. An estate planner can help you find exceptions and establish protection for your major assets.

How We Can Help

These regulations are complex and changing—don’t try to face them alone. Attorney Mike Bascom is an experienced Georgia estate attorney who can help protect your assets. Call us today at 770-285-5493 to schedule your free initial appointment.