If you earn sufficient retirement credits while you are working, you will qualify for Medicare when you reach the age of 65. Medicare is a government health insurance program that you pay into when you are paying your taxes throughout your life.
You can earn as many as four retirement credits per year, and you need 40 credits to qualify for Medicare.
Medicaid is also a government health insurance program. You don’t need retirement credits to qualify for Medicaid. This program is available to people who can demonstrate sufficient financial need.
Many people who qualify for Medicare ultimately seek Medicaid eligibility because Medicare will not pay for long-term custodial care. This would be the type of care that you would receive in a nursing home or assisted living community. It should be noted that some people can receive custodial care in their homes.
Medicaid will pay for long-term care, and it is the solution for most seniors who are residing in nursing homes.
Medicaid Asset Limit
There is a Medicaid asset limit that stands at $2,000 for an individual in most states. However, everything that you own does not count when Medicaid is considering your application.
If you are a homeowner, the value of your home does not count when Medicaid is determining your eligibility, but there is an upper equity limit. In 2014, the upper equity limit in Indiana is $543,000. If you enter a long-term care facility and your spouse is remaining at home, there is no upper equity limit.
One vehicle that is used for transportation is not considered to be countable. You can also retain ownership of your heirloom jewelry, your wedding ring, and your engagement ring.
Under Medicaid regulations, you can have a life insurance policy valued at up to $1,500, and you can have the same amount set aside for burial or cremation expenses.
Your personal effects and household goods would not be counted for Medicaid purposes.
Medicaid Spend Down
To become eligible for Medicaid, you could spend down your assets before you apply for eligibility. However, you must complete the spend down at least five years prior to applying for Medicaid coverage. If you give away assets within five years of applying, you are penalized, and your eligibility is delayed.
Free Report on Medicaid Planning
Our firm has prepared a free special report that takes an in-depth look at Medicaid planning. The rules and regulations are complex, so this report is invaluable for those who are interested in future Medicaid coverage.
To obtain access to your copy of the report, click this link and follow the simple instructions: Medicaid Planning Report.
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.