You may have gone your entire life without ever needing to apply for Medicaid and now suddenly find yourself faced with the need for Medicaid benefits. Typically, this occurs to older individuals who are in need of long-term care. Because you have never used Medicaid before you may know very little about the program much less about the application process. You may, therefore, wonder “ Should I drop my health insurance when I apply for Medicaid? ” The simple answer to that question is “no” but it helps to understand why.
Medicaid is a federally funded but state administered health care program that provides benefits to low income individuals and families as well as to the disabled and elderly. Over half of all seniors eventually end up relying on Medicaid benefits at some point in time, typically as a way to help cover the high cost of long-term care. If you have applied for Medicaid benefits you should not cancel any insurance coverage you currently have until you receive a response to your application form the Medicaid program.
Although application review times can vary, most states tell applicants it takes up to 45 days to review an application for Medicaid. For those applying for Medicaid for the elderly it can take even longer. One reason for this is that the Medicaid program employs a “look-back” period when determining eligibility for Medicaid for long-term care. The “look-back” period essentially reviews your finances for the previous five years to see if you have made any asset transfers during that time. Because eligibility for Medicaid depends, in part, on your income and assets any asset transfers can be imputed back into your estate and serve to disqualify you for Medicaid benefits or cause you to enroll in a Medicaid “spend down” program.
Because it can take weeks, even months, to receive a decision about your Medicaid application it is never a good idea to cancel existing health insurance coverage prior to receiving an approval letter. If your application is approved your coverage may date back as far back as three months prior to the date of approval; however, until you are told what coverage you are eligible for it is always best to keep existing coverage active.
If you have additional questions or concerns about Medicaid planning, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
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