Covering Your Care Needs in Maryland

As you age, it’s important to plan for Medicaid and/or long-term care

By Judy Malmon, J.D. | Last updated on January 19, 2023

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If you think estate planning is only for gazillionaires, you may be overlooking important planning for your care as you get older, and how this may affect your children and grandchildren. No one wants to be a burden and, if possible, we’d all like to have something to pass on after a lifetime of working. Hoping for the best isn’t a plan, and can have devastating effects. For every year you survive beyond the age of 65, you become statistically more likely to have need for long-term care (LTC). LTC can be anything from in-home care to a skilled nursing facility, all of which are extremely costly. In Maryland, ranked the 12th most expensive state for care, you can expect to pay $300 per day or more for a nursing home, depending on where you live and the level of care needed. Planning for long-term care is a complicated undertaking, in part because each person’s situation has different factors in play, including information you can’t know in advance, such as when you’ll need it. But it’s less expensive and easier on your loved ones to plan ahead than to figure things out in a crisis. Working with a reputable estate planning attorney will help you assess your needs.

Medicaid Eligibility

Don’t plan to rely on Medicare for LTC, as this program only covers acute needs and maxes out at 100 days. Medicaid, on the other hand, is a federally funded program that pays for long-term nursing home care, but only for those who can no longer care for themselves and who qualify based on income/assets. The rules are complicated, but generally, in Maryland, you may have no more than $2,024 per month income, and assets are capped at $2,500, other than a home (if your spouse is still living in it), plus a few other exceptions. It may be possible to be eligible with a slightly higher income level, as Maryland allows you to “spend down” excess income to qualify. If you take other recommended steps before you need LTC—such as the transfer of your assets to heirs via a gift, life estate or irrevocable trust—Medicaid takes this into account. When you apply, any transfers made within the last five years will be counted among your resources, and you won’t be eligible if what you gave away plus what you still have put you over the limit. You’ll be responsible for covering any amount of your care costs until you’ve “spent down” to the resource eligibility limit.

LTC Insurance

Another option to consider in LTC planning is insurance. Depending on when you begin your planning, you may be able to secure an insurance policy that covers your future in-home or nursing home care costs at a fraction of the actual price, paying a monthly or annual premium. The best time to sign up for coverage is well before you think you’ll need it, ideally in your early-to-mid-50s. You’ll need to be assessed as medically eligible, a threshold you’re more apt to clear when younger.

Combining the Two

Many estate planning attorneys recommend a combination of Medicaid planning and LTC insurance for their clients as the best protection for their long-term care needs. It’s possible to secure an insurance policy to cover up to five years of care, allowing asset transfers to be made without fear of needing LTC before the end of the look-back period. After that, it could be determined if enough funds remain to continue the policy, or whether you would qualify for Medicaid. Planning for your care as you age can be both complex and emotionally difficult, but the right attorney can help protect your hard-earned resources, health care security, and peace of mind. For more information on this area, see our overview of elder law and estate planning.

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