Medicaid is one of the least understood and most often overlooked programs when it comes to long-term care. The program is designed to help those with financial need to qualify for health care coverage, but the reality is that even those who wouldn’t normally consider themselves poor may qualify for this program when they become senior citizens and begin needing long-term care assistance.
If you don’t plan for this possibility, however, it may be much more difficult to qualify for the program. With this in mind, you should make planning for Medicaid a part of your long-term health and financial planning no matter how old you are. The following four steps can be taken at any time.
#1 – Don’t Expect Medicare to Pay for Long-Term Care
Medicare is a completely different program than Medicaid. Medicare is specifically made for seniors, whereas Medicaid is for anyone with financial need (including seniors). As people get older they often expect that Medicare will pay for their long-term care, should it be needed. Medicare, however, will usually only pay for skilled nursing and other care for up to 100 days. For true long-term care, you’ll need to turn to Medicaid. Understanding this now can help you to be prepared and effectively plan.
#2 – Consider Using Irrevocable Trusts
Since Medicaid is a needs based program there are some very strict limits on how many ‘countable assets’ an individual can have and still qualify. If you don’t plan ahead, you may be required to liquidate some things (your home and vehicle are protected) before you can get on the program. Having an Elder Law attorney set up an irrevocable trust, however, can help to protect many of your assets.
#3 – Transfer Assets Today
Whether you plan to use an irrevocable trust or you just want to start transferring ownership to loved ones so they don’t count as assets in qualifying for Medicaid, you need to act soon. The transfer of ownership to another person or a trust must have taken place at least five years prior to applying for Medicaid to avoid any penalties.
#4 – Protect Life Insurance Policies
If you are married and have a life insurance policy, you want to make sure that the benefits of the policy do not cause your surviving spouse to become disqualified from Medicaid eligibility. Having the benefits of a life insurance policy available immediately can be critical, but additional planning is often required to make sure the surviving spouse has what they need to live on while still qualifying for the Medicaid program.
There is no doubt that Medicaid planning can be difficult and confusing, which is why it is so important to work with a knowledgeable attorney. If you have any questions about Medicaid, please don’t hesitate to contact us and set up an appointment with attorney George Hough.
