A change in government inevitably means changes in legislation and the new administration is no exception. On his first day in office, President Biden signed ten executive orders which address a range of topics including vaccine production, testing, and access to healthcare. One, entitled “Executive Order on Strengthening Medicaid and the Affordable Care Act” is of special relevance to long-term care planning—a subject which concerns everyone, especially as Covid-19 continues to threaten communities.
Medicaid-Specific Changes
The central message of policy introduced by the new administration is that Medicaid will operate as a cornerstone of the Affordable Care Act and, according to Jocelyn Guyer, managing director at Manatt Health, “a primary vehicle for coverage for people, particularly during the pandemic.” This will be achieved in two principle ways.
First, states given ten-year expansion waivers which exempt them from certain provisions of federal law in state Medicaid programs may see those revoked. In turn, these states could receive increased federal funding aimed at expanding the program. Areas where significant gaps in low-income coverage exist are the most likely to be affected by such shifts in policy.
Second, the new administration is likely to act against block grants approved by the previous administration. These grants, which permit states to transform their Medicaid programs into demonstration projects that seek to develop alternative coverage options stand in the way of Medicaid’s expansion.
What Does This Mean for Individuals?
None of the changes mentioned have yet become policy and yet the Biden administration’s priorities are clear. Access to Medicaid looks set to expand and policies that undermine protections for patients with pre-existing conditions, create barriers to coverage, or reduce affordability will likely be eliminated. This means that even more so than before, Medicaid is the best way for most US families to gain protection from the crippling costs of long-term care.
The sooner you begin planning, the easier it is to ensure you qualify for Medicaid when you need it. After all, one aspect of the program that is sure not to change regardless of who sits in the Oval Office is the five-year lookback period employed to dissuade applicants from making inappropriate gifts or transfers for the purpose of meeting Medicaid’s asset and income limitations. This rule means that individuals who strategically shuffle around finances within the five-year period preceding their need for Medicaid are subject to a penalty period inhibiting their access to the program. If planning begins more than five years prior, however, access can be assured.
There is nothing wrong with arranging assets to make sure you are covered in your golden years. As a rule of thumb, in 2021 an individual must have income less than $2,382 per month and no more than $2,000 in in assets to qualify for nursing home Medicaid. While these limitations do not count an individual’s house, they are nonetheless stringent enough to exclude most middle-income families. Nonetheless, most middle-income families will struggle to pay the average $8,700 monthly cost of nursing home care and so planning to ensure you aren’t stuck with such a bill is crucial.
At Miller Estate and Elder Law we offer free estate planning and asset protection workshops designed to educate clients about how best to plan for their individual long-term care needs. We also bring years of experience to the planning process, itself, and so whether you are looking to get started or simply learn more about how Medicaid is changing in 2021, don’t hesitate to give our office a call at 256 251-2137 or contact us through our website.