When you hear mention of the word Medicaid, you may lose interest because you will qualify for Medicare when you reach the age of 65. Medicaid is only of value to people with very limited resources, right?
Medicaid is a need-based health insurance program that is theoretically in place to provide a health care safety net for financially needy people. However, a very significant percentage of elder Americans ultimately apply for Medicaid, even if they were qualified for Medicare coverage.
Most seniors will need long-term care eventually, and Medicare does not pay for assistance with your activities of daily living. This is looked upon as custodial care rather than medical care. Medicare will pay for up to 100 days of convalescent care, but that’s the extent of it.
Medicaid will pay for long-term care, and this is why Medicaid is relevant to so many seniors.
There are very stringent asset and income limits that you must consider if you would like to qualify for Medicaid as an elder. The asset limit for an individual is just $2,000 in most states.
People typically divest themselves of assets prior to applying for Medicaid. This is called a Medicaid spend down. You do have to act well in advance, because there is a five-year look-back. You must complete your divestitures at least five years prior to applying for coverage, or your eligibility will be delayed.
Long-term care is extremely expensive. We practice law in the state of Indiana. The median cost for a year in a private room in a nursing home in Indiana is over $85,000 according to Genworth Financial, and assisted living communities are also quite expensive.
Medicaid will pay for nursing home and assisted living community costs, but you may prefer to receive the care that you need at home. You can potentially get financial assistance for in-home care through a program that is funded by Medicaid called the Home and Community-Based Services Program.
This program is called a waiver program, because the asset and income limits are less stringent than the limits that are in place for direct Medicaid coverage. Professional in-home caregivers charge for their services, but in-home care is typically going to be more affordable than institutionalization. The waiver program is in place because it saves money in the long run.
The financial element is certainly significant, but many people would prefer to remain at home if it is at all possible for a number of different reasons. For these individuals, the Home and Community-Based Services Program can provide the ideal solution.
Special Report on Medicaid Planning
In this post we have provided some basic facts about Medicaid. If you would like to learn more about Medicaid planning, download our special report on the subject. This report is being offered free of charge, and you can obtain access through this link: 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.