AndersonPiza\/Envato <\/p>\n
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If you\u2019re juggling kids, a career and aging parents, you\u2019re not alone. Roughly one in four U.S. adults is stuck in the \u201csandwich generation,\u201d trying to hold it together. It\u2019s a grind that drains your time, energy and wallet.<\/p>\n
Between lost work hours and paying for things like adaptive devices or long-term care, the costs pile up fast. One study from the National Library of Medicine found that caring for an elderly parent can cost anywhere from $144,302 to $201,896 over a two-year period (1).<\/p>\n
Take Katie, for example. She\u2019s caring for her 85-year-old mom, whose mental health is declining, and fears she\u2019ll soon need to move into a nursing home. With nursing homes’ costs topping $100,000 a year \u2014 and in-home care around $75,000 \u2014 Katie is worried how she\u2019ll cover it all.<\/p>\n
Katie’s mom hopes to qualify for Medicaid, which covers nursing home and other long-term care costs that Medicare usually doesn’t. But Medicaid is a means-tested program, meaning applicants can\u2019t have more than $2,000 in countable assets or earn too much income (2).<\/p>\n
Katie is listed as a beneficiary on her mom’s pension and retirement accounts. She wonders: Will that help her mom qualify for Medicaid \u2014 and allow Katie to keep the money?<\/p>\n
Even if Katie is a co-owner, those accounts are still considered her mother\u2019s.<\/p>\n
When the government reviews Medicaid eligibility, any jointly held accounts are counted unless there\u2019s clear proof the funds don\u2019t belong to the Medicaid applicant. For instance, if Katie and her mom have $20,000 in a joint account \u2014 even if Katie contributed $15,000 \u2014 Medicaid will assume the funds belong to both women equally unless Katie can prove otherwise with receipts and documentation (3).<\/p>\n
To qualify for Medicaid, Katie’s mom would need to spend down those joint accounts before she can get coverage. If her pension income is too high, she also won’t qualify \u2014 unless she uses that income to cover nursing home care and can show she can\u2019t afford the full cost (4).<\/p>\n
If Katie’s mom does qualify for Medicaid and still dies with assets remaining, Medicaid estate recovery rules may allow the state to reclaim some of the costs of her care (5). Having Katie\u2019s name on the account won\u2019t protect that money (6).<\/p>\n
Medicaid is meant for people in genuine financial need, so the system includes safeguards to prevent people from hiding assets just to qualify (7).<\/p>\n
However, many Americans who don\u2019t qualify for Medicaid still struggle to cover the costs of their basic health care, including dental, vision and pharmaceutical bills. Just under half of U.S. adults report that it\u2019s difficult to afford their health care costs, according to the Kaiser Family Foundation (8).<\/p>\n
If you\u2019re already unsure how to budget for extra health expenses as you get older, joining AARP can help keep your expenses low. Their program provides discounts on vision, hearing and other health services.<\/p>\n
Rising health care costs, in combination with the uncertain markets, can make it harder to stretch your fixed income to unexpected necessities like new glasses or dental work.<\/p>\n
Joining an organization focused on older Americans like the AARP<\/a> for discounts on prescriptions and dental plans, and even travel, entertainment and insurance, could help keep your budget manageable.<\/p>\n AARP not only offers money-saving perks, but can also help you make informed financial decisions and potentially save on health care costs. So far, they\u2019ve helped save about $25 billion in prescription drug costs for Americans on Medicare. AARP members also get access to guides that can help you make the most of Social Security<\/a>, choose the right Medicare plan and uncover other government benefits \u2014 potentially saving you thousands.<\/p>\n Even better, if you sign up with AARP today, you can get 25% off your first year<\/a>.<\/p>\n Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)<\/a><\/p>\n There are ways to protect assets while still planning for Medicaid eligibility, but timing is everything. Medicaid has a five-year \u201clookback\u201d period to prevent applicants from transferring assets or income to qualify unfairly (9).<\/p>\n That means if you give away or transfer assets to children, beneficiaries or a trust within five years of applying for Medicaid, you could face a penalty period before becoming eligible.<\/p>\n The key is to plan well in advance. An estate planning attorney can help navigate the process and ensure transfers comply with Medicaid rules.<\/p>\n You might also want to speak with a financial advisor who specializes in helping older Americans. The right advisor can help you set up a plan to spend down your accounts safely, and hopefully ensure you qualify without any \u201clookback\u201d penalties.<\/p>\n Advisor.com<\/a> can help you find a professional financial advisor who will guide your planning for Medicaid eligibility, or discuss other options for funding your potential health care expenses in retirement.<\/p>\n How it works is simple: Just answer a few quick questions about yourself and your finances. Then the platform will match you with up to three experienced fiduciary financial professionals to help you develop a plan to achieve your retirement goals, including ensuring your health care needs will be met.<\/p>\n You can view the advisors\u2019 profiles, read past client reviews and schedule an initial consultation<\/a> for free with no obligation to hire. From there, you can discuss your advisor\u2019s fees and billing schedule to determine what\u2019s right for you, your budget and your family.<\/p>\n For example, if Katie\u2019s mom had transferred assets decades earlier after speaking with an advisor \u2014 say, when she was in her 50s \u2014 to help Katie buy a home, she could have protected that portion of her money. If her name wasn\u2019t on the property deed, it wouldn\u2019t have been counted as part of her assets later on.<\/p>\n Even though adding children as beneficiaries or co-owners doesn’t help with Medicaid planning, it can still make sense for other reasons.<\/p>\n If Katie’s mom became incapacitated or died, Katie could access the funds to pay bills without waiting for court approval to become her guardian or executor. Shared access can also help adult children monitor accounts for fraud or scams \u2014 a growing concern for older adults, totalling $20.3 billion each year (10).<\/p>\n While it may be too late for Katie\u2019s family to pre-plan for Medicaid coverage, she still has options. Her mom can spend down assets to pay for care until she qualifies. For others, the lesson is clear: don\u2019t wait. Talking with an estate planning lawyer now can help protect your family\u2019s assets and prevent costly complications later.<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n National Library of Science (1<\/a>); American Council on Aging (2<\/a>); Medicaid Long-Term Care (3<\/a>); National Council on Aging (4<\/a>), (6<\/a>); Elder Needs Law (5<\/a>); Marketwatch (7<\/a>); KFF (8<\/a>); Medicaid Planning Assistance (9<\/a>); Where You Live Matters (10<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"AndersonPiza\/Envato Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. 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