3 Frequently Asked Questions About Medicaid Planning
This is often a source of confusion for many people, and understandably so. Medicare is a federally funded program that helps most U.S. citizens and permanent legal residents age 65 and older to pay for health care. Medicaid, on the other hand, is a program funded by both the federal and state governments that covers many health care costs for low-income individuals and their families. You would think, therefore, that Medicare would be your best bet for coverage for long term care, such as nursing homes and other assisted living situations. However, Medicare has its limits and doesn’t cover as many services as Medicaid. For instance, it will only cover up to 100 days in a nursing home, and oftentimes, it will cover even less. This is why it is often necessary to make yourself “medically needy” to the point that you meet the eligibility requirements for Medicaid.
How do I qualify for Medicaid?
In order to qualify for this type of financial aid, there are many different strategies. You may have heard people talk of “gifting” or giving away their assets in an effort to make themselves poorer. This should never be done without a skilled nursing home planning attorney. For instance, you may disqualify yourself for Medicaid if you transfer assets, or gift, during the “look-back” period, which is five years prior to the time of application. That is not to say that you cannot make any gifts during this time, as some are allowed. In addition, some assets are simply not counted as assets and therefore will not count against the $1,500 limit in countable assets. For more information on how to effectively “spend down” your assets so that you qualify, call Lovett & House Co., LPA in Tipp City, Ohio.
There are also certain medical conditions that should automatically qualify you for Medicaid. In most cases, nursing home services are “medically necessary” if a person has advanced dementia or cannot perform at least two of the following activities: transferring, toileting, continence, dressing, bathing, and eating.
What are the risks associated with Medicaid planning?
One major risk associated with this type of planning is the inability to retrieve gifts that you have given. For instance, if you give away the majority of your countable assets to someone, you give up control of said assets. By being extremely select with the person you choose to receive your gifts, you can protect them to a certain degree, but you can never foresee everything. The receiver of the gift could die unexpectedly, divorce, file bankruptcy, or experience other tragedies that would affect the future of the assets they were given. In order to minimize the risk of losing your assets, you should consider setting up a Medicaid trust and designating that person as the trustee. By doing so, the assets will not belong to that person and therefore will not be subject to his or her creditors and will not pass through his or her estate upon death. Click here to learn more about setting up a Medicaid trust.