May 15

How the VA Improved Pension with Aid and Attendance Benefit Supplements Medicaid

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The following fictional story is an example of how the VA Aid and Attendance benefit works with Medicaid. Every situation is unique, and Butcher Elder Law cannot guarantee exact results. The rules and exemptions could differ. Other Medicaid cases might have more exemptions or exceptions leading to a higher percentage saved.


Bob is a single veteran who needs long-term care in a nursing facility. He has $150,000 in assets and a monthly income of $2,000. He knows the nursing home he selected will cost $8,000 per month.


If Bob contributes all of his monthly income to care, paying out-of-pocket for one year will reduce his assets from $150,000 to $78,000 in the first year, and then to just $6,000 after two years.


Bob bravely served his country, worked hard to save money and does not want to die penniless. Upon his death, he would like to make a gift to a charity that benefits other veterans.


Because Bob is entering nursing care, we consider his case in crisis.


We work with Bob to determine an asset protection plan he is comfortable with, that will still allow him to qualify for Medicaid.  We determine that he can protect $80,000 of his total assets of $150,000, utilizing an asset-protection trust.  The plan will allow Bob to qualify for Medicaid in 12 months.


With the help of the VA Improved Pension with Aid and Attendance, Bob can expect to receive an additional $1,075 per month.  This plan will allow Bob to protect $84,000 and qualify for Medicaid in 13 months. The additional income from the VA Improved Pension with Aid and Attendance will help Bob pay through his private pay period while he waits for Medicaid benefits to begin.


Once he is approved and receiving Medicaid, Bob will no longer receive the Aid and Attendance benefit.  He will however be permitted to keep a higher personal needs allowance from his monthly income because of his VA status.


While we were able to help Bob save a significant portion of his assets, we could have protected more had he started planning earlier.


If you are a veteran over the age of 55, we recommend scheduling a no-obligation consultation to determine eligibility and a timeline to protect assets and prevent potential mistakes.