Over the course of their lives, many seniors will end up needing some form of long term care.

Whether it’s a nursing home, in-home caregiver or something else, long term care is expensive. Few people have enough in savings to pay for all of the costs out of pocket.

For some people, Medicaid can be a very good tool to pay for long term care. However, not everyone qualifies for Medicaid, and using Medicaid can have some unexpected financial consequences. Here are a few things you should know if you are considering Medicaid for yourself or a loved one.

Eligibility requirements are different in every state

Medicaid is a federal program, but it is administered by state agencies. In Washington, the program is managed by the Department of Social and Health Services (DSHS).

There are several Medicaid programs in Washington, including Institutional (Nursing Home) Medicaid, COPES, and Community First Choice. All of these provide long term care in different settings. All programs have strict asset and income, as well as medical need requirements.

It is best to review your case with an attorney to determine the best course of action to pay for care and to determine which program(s) are the best fit for you.

Planning ahead is in your best interests

Many people have to spend down their assets to qualify for Medicaid. However, if you plan ahead, it is possible that you will be able to protect some of your income and assets by using trusts or other estate planning tools.

However, any planning must be done well in advance because of the Medicaid Look-Back. At the time of application for Medicaid benefits, you are required to disclose any gifts made in the five years prior; those gifts can result in a period of time in which you are not eligible for benefits.

Medicaid may have a claim on your estate

When Medicaid is used to pay for long term care for someone age 55 or older, the state can try to recover some of what it spent after the person dies. This is called “Estate Recovery.” Essentially, the state makes a claim against the recipient’s estate to get paid back for the cost of care.

There are exceptions to this rule. For example, the state won’t initiate Estate Recovery if the Medicaid recipient has a surviving spouse or dependent child. There is also an exception if recovery would cause undue hardship to the recipient’s family.

It is possible to use estate planning tools to protect some of your assets from the possibility of Estate Recovery. If you’re considering Medicaid as an option to pay for long term care, talk to an estate planning and elder law attorney who can help you understand all of your options under the law.