If you are at, or nearing, retirement age, and you have never needed to rely on Medicaid to cover your health care costs, you may know little about the program. If so, now is a good time to change that because there is a particularly good chance that you, or your spouse, will need to rely on Medicaid in the future. To help you get started, a Medicaid planning attorney at Nash Bean Ford & Brown, LLP explains five things you really need to know about Medicaid.
- Being covered under Medicare does not mean you will not need Medicaid. Most Americans pay into Medicare over the course of their working years which results in automatic enrollment in Medicare when they turn 65 years old. If that includes you, it is important to know that while Medicare will cover many of your basic healthcare expenses, it will not cover LTC expenses. You may also retain private health insurance coverage. Unless you purchased a separate long-term care (LTC) policy your policy likely excludes LTC expenses. Medicaid, however, does cover LTC expenses which is why many seniors rely on both Medicare and Medicaid at some point.
- You can own a home and still qualify for Medicaid. It is true that eligibility for Medicaid is based, in part, on the value of your “countable resources.” In most states, an individual cannot have countable resources valued at over $2,000 or the application for Medicaid will be denied. What many people do not know is that most states also exempt a primary residence up to an equity limit if a spouse is in occupancy. Your home could be at risk after you are gone if you rely on Medicaid to cover LTC expenses. The Medicaid Estate Recovery Program (MERP) can file a claim against your estate after your death to seek reimbursement for expenses paid on your behalf while you were alive. Incorporating a Medicaid planning component into your estate plan can protect your assets now and after you are gone while simultaneously ensuring that you are eligible for Medicaid if you need it in the future.
- Your spouse will not be left with nothing if you need to rely on Medicaid. Prior to changes in the federal Medicaid rules, the spouse that remained in the home (the “community spouse”) was frequently left destitute because of the “countable resources” and “spend-down” rules. The Spousal Impoverishment Rules, however, changed that. A community spouse is now entitled to retain a significant portion of a couple’s countable resources as well as sufficient income of his/her own or even some of the institutionalized spouse’s income, if necessary, to provide a basic standard of living.
- Last minute asset transfer will not work if you need to qualify for Medicaid. At one time it was possible to transfer assets to adult children or other adults you trusted in anticipation of applying for Medicaid; however, Medicaid now uses a five-year “look-back” rule that prevents those asset transfers. Your finances will be scrutinized, and any transfers made for less than fair market value will likely be discounted, and you will incur a waiting period. The length of the waiting period will depend on the value of the assets in question and the cost of LTC where you live.
- Medicaid may help pay for alternatives to nursing home care. Most seniors want to remain in their homes if possible before they are stuck in a long-term care facility. Medicaid may be able to help with this as well. In most states, Medicaid will cover alternatives to nursing home care, such as daily home health aides, community care, and assisted living. Some states even have waiver programs that allow family caregivers to receive payment for the care they provide.
Contact a Medicaid Planning Attorney
For additional information, please download our FREE estate planning worksheet. If you have additional questions or concerns about Medicaid, contact an experienced Medicaid planning attorney at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.