There are people who don’t understand why Medicaid would be something that is relevant to senior citizens. You work all of your life and payroll taxes are deducted from your wages or salary. These taxes are going toward benefits that you become eligible for when you are a senior citizen. These would include Social Security and Medicare.
Medicaid is a health care safety net that is in place for people who have virtually no financial resources. Why would a person who is eligible for Medicare ever need Medicaid?
This is a good question, and unfortunately a significant percentage of individuals don’t understand some very important facts of life. Medicare does not pay for everything once you become eligible for the program at the age of 65. There are out-of-pocket costs, and you should be aware of these when you are budgeting ahead for your retirement years.
The out-of-pocket expenses are something to take seriously, but there is also the matter of long-term care. The Medicare program will not pay for an extended stay in a nursing home or an assisted living community. If you need convalescent care after surgery Medicare may be of assistance, but it won’t pay for long-term care.
You may be willing to bite the bullet as it were and resolve to pay for long-term care out of your savings if you do in fact need to relocate to an assisted living community or a nursing home. This may be possible for some people, but the costs associated with long-term care are astronomical, and they are rising year-by-year.
Our firm practices in the greater Indianapolis area. According to the MetLife Mature Market Institute in 2012, the average daily charge for a private room in a nursing home here in Indianapolis was $237. The average length of stay according to a government survey is around 27 months.
Imagine paying $237 each day for 27 months. You’re looking at a figure that is in the vicinity of $200,000.
For many, the solution is Medicaid. This program will assist with long-term care expenses if you can meet the eligibility requirements.
Because it is intended for people with very limited financial resources there is an upper asset limit of $1,500.
Many people ask if you could just give away your assets in an effort to qualify for Medicaid. The answer is yes and no.
There is such a thing as “spending down” with eligibility for Medicaid in mind. However, if you give away assets within five years of applying for Medicaid you are penalized and your eligibility is delayed.
As a result, if you want to divest yourself of assets in anticipation of applying for Medicaid you should plan ahead carefully in advance. If you would like to explore Medicaid planning strategies with a licensed Indianapolis elder law attorney simply take a moment to contact our firm to request a free consultation.
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