If you are fortunate enough to have had employer sponsored or private health insurance for your entire life you may know very little about the Medicaid program other than it is a healthcare program for low income families and individuals. Like many people though, you may find yourself in a position where you suddenly need to know more about Medicaid because a parent, or other elderly loved one, needs to qualify for Medicaid benefits. To begin with, you likely need to know how you apply for Medicaid for your loved one in Illinois.
What Is Medicaid?
Medicaid is a program that is primarily funded by the U.S. federal government; however, the individual states administer the program. For that reason alone it is possible for the eligibility requirements as well as the available benefits to vary somewhat from one state to the next. The purpose of Medicaid, however, remains constant across the country. Medicaid provides healthcare to low income individuals and families as well as the elderly and disabled. Medicaid works similarly to private health insurance coverage in that it pays for doctor and hospital visits, prescription medication, and other healthcare related expenses.
Why Would My Parent Need Medicaid?
Your parent may have never needed to qualify for Medicaid before; however, if your parent now needs to be admitted to a long-term care facility Medicaid may be the only option for covering the expenses associated with that care. The average cost of a year stay in a long-term care facility nationwide is over $80,000. Medicare will not cover long-term care costs except in very limited circumstances and then only for a limited amount of time. Likewise, most basic healthcare insurance policies don’t cover long-term care expenses, leaving almost half of all seniors to turn to Medicaid for help because Medicaid does cover long-term care costs. Of course, your parent must first qualify for Medicaid benefits which can be a challenge.
Applying for Medicaid
Applying for Medicaid benefits can be done in person at one of the many Illinois Department of Human Services (DHS) offices or online through the Illinois Web Benefits webpage. If the applicant is unable to make it to an office and does not have access to the internet an application can be mailed to them as well. Once an application is complete an interview will be scheduled over the telephone.
Preparing to Apply for Medicaid
Applying for Medicaid benefits is not the difficult part – getting an application approved is, particularly for many seniors. Because Medicaid is a “needs based” or “means test” program and applicant’s income and assets are taken into account when determining eligibility. For most seniors, income is not an issue as they are likely on a fixed retirement income; however, the assets test can be a problem. In the State of Illinois, most individuals are limited to $2000 in countable assets if they wish to qualify for Medicaid. Although some major assets are considered exempt, any seniors have assets valued above the limit unless they planned ahead and included Medicaid planning in their estate plan. Transferring assets in anticipation of applying for Medicaid is not a viable option wither because Medicaid employs a five year “look-back” period. Essentially, this means that when reviewing an application the applicant’s finances will be reviewed for the five year period prior to the date of application and any asset transfers that occurred during that period will likely be discounted and the value of the asset imputed back into the applicant’s estate.
Is It Too Late to Employ Medicaid Planning Strategies?
Ideally, Medicaid planning strategies are incorporated into an estate plan years before the individual needs to qualify for Medicaid benefits; however, that does not mean there is nothing that can be done to help preserve assets and still meet the eligibility requirements. Sometimes, for example, a non-exempt asset can be turned into an exempt asset. If your parent has $20,000 in securities, for instance, that are not considered exempt it may be possible to pay down a mortgage with those assets instead of losing them. By doing that you may be able to turn your non-exempt assets into exempt assets because equity in a primary residence can be exempted.
If you find that Medicaid benefits are needed and you are concerned about meeting the eligibility requirements the best thing you can do is consult with an experienced Illinois estate planning attorney as soon as possible. For more information, please join us for one of our upcoming seminars or contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.