If you have diligently saved for retirement as a working person, you may wonder why you will ever want to qualify for Medicaid. After all, you will qualify for Medicare to pay for your health care expenses, and Medicaid is a health care program for people with very limited financial resources.
This is a very logical rationale, and many younger people see no reason to dig deeply into the Medicare rules and regulations. At the same time, when you look at the facts, you see exactly why you may want to qualify for Medicaid at some point in time.
The majority of elders are eventually going to need help with their day-to-day needs. When you need help with your activities of daily living, the type of care that you receive is called custodial care. Medicare does not pay for custodial care, but Medicaid will pay for this type of care. This is why many people who were never poor ultimately want to qualify for Medicaid.
Since Medicaid is a need-based program, there is an asset limit. This limit is just $2,000 for an individual, but everything that you own does not count. Your home is not a countable asset, but there is a $552,000 equity limit in Indiana during the current calendar year. You can also retain ownership of one vehicle, your household goods, your personal effects, and your wedding rings.
Giving Away Assets
When it comes to the assets that are countable, you may assume that you can just give them away if and when you find that you need long-term care so that you can qualify for Medicaid. The powers that be want to prevent you from doing this, so there is a five-year look-back. To qualify in a timely manner, you have to complete your gift giving at least five years before you apply for Medicaid coverage.
Because of this look-back, advance planning is key if you want to qualify for Medicaid at the ideal time.
Long-term care costs are a very big deal. A year in a nursing home can cost somewhere in the vicinity of $90,000, and people often spend multiple years receiving care. In fact, the average length of stay is over two years, and 10 percent of nursing home residents remain in the facilities for at least five years.
Medicaid is the solution for most people, but it takes careful planning to qualify without losing anything in the process. If you would like to discuss all the facts with a licensed professional, send us a message through this page to set up a free consultation: Indianapolis IN Elder Law Attorneys.
At the consultation we will answer all of your questions, gain an understanding of your financial situation, and help you put a plan in place if you decide to go forward.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.