Medicaid is a payment assistance program, funded with your income tax dollars. For those who qualify, Medicaid helps pay for, among other things, the cost of home care and nursing home care when a recipient can no longer care for himself.
By Stephen K Lehnardt
What is Medicaid? More than likely you have heard of Medicaid, considering it has been a regular topic of the national political debate for years. You may also know someone who has struggled with the Medicaid system. But what exactly does Medicaid mean to you and your elderly loved ones?
If you are more than 60 years old, or if you have elderly parents, you owe it to yourself to learn about Medicaid, how it works, what its pitfalls are, and how you can successfully work within Medicaid’s framework of laws, rules and regulations to obtain benefits if you need them.
A recent Forbes article “Medicaid And Your Parents: The Basics” is a good place to start. Essentially, Medicaid is a program run jointly by the federal government and each respective state government. Many (including the article) describe Medicaid as government insurance for, among other things, late-in-life medical care like home care or nursing home care when the one needing care has too limited financial resources.
Medicaid is “means-tested.” This means that having too much income or too many assets will disqualify a Medicaid applicant and create a legal hurdle to receiving benefits. In addition, having “assets” is not the same as having the money to pay for care.
Many times people who simply “give” away assets that exceed Medicaid limits are disqualified from Medicaid assistance if those transfers violate a “look back” period. The look back period is designed to discourage people from trying to protect assets rather than “spending down” until they are poor. Of course, an elderly individual might have had innocent intentions when they made a disqualifying gift a few years prior and the need for Medicaid was unforeseen. Regardless, such transfers are a red flag and create problems when it comes to Medicaid qualification.
Each state is different in its approach, but these are very real rules and they require careful thought and timing. Otherwise, it is easy to run afoul of the rules now and be disqualified from care later. You owe it to your elderly loved ones to start planning for a worst case scenario without delay.
For more information in Liberty, MO and the Kansas City Area about planning for Medicaid and long-term care costs, protecting your assets, effective estate planning, and to access free information and tools to organize your estate, visit our estate planning website.
Reference: Forbes (February 11, 2014) “Medicaid And Your Parents: The Basics”