There is really very little that is “basic” about Medicaid or Medicaid planning. That being said the purpose of this post is to just introduce the topic to someone who has never had the reason to investigate the program until right now. Below you will read some very general information about what Medicaid is, who it applies to, and how to become part of the Medicaid program.
The first question that I get from many prospective clients is “I hear about Medicare on TV- isn’t that the same thing as what we are talking about when you are telling me about Medicaid?” The answer is NO. Medicare and Medicaid are different programs that while often applying to those in similar age and disability groups were created for and are administered to a different subset of the population.
BOTH Medicaid and Medicare are for people age 65+ or people of any age who are disabled. (Medicaid is also for younger people too, but they have different eligibility rules not part of the program discussed in this post.)
MEDICAID is limited to those with low income and minimal assets.
MEDICARE is a health insurance program that has no eligibility concerns as to income or assets, but has high out of pocket deductible and insurance costs.
For purposes of Estate Planning and Asset Preservation, the key is that Medicare covers only minimal home care or skilled nursing facility that is usually short-term only. This short term period is typically only a matter of weeks or very few months.
Only Medicaid covers institutional long-term care (Nursing Home) and full-time home care, depending on medical need.
To qualify for Medicaid, all applicants must meet very strictly defined eligibility requirements. The key requirement is that the applicant not have too much income or too many resources. Income as you can imagine is calculated as the amount being received each month from payment sources. Typically these are things such as Social Security and pension or retirement payments. Resource is basically another word for liquid assets (bank accounts, stocks, CDs, etc.)
This is where some people who I speak with will say “Well I suppose it doesn’t apply to me then because I’ve worked very hard in my life to provide for my family and accumulate some savings.”
While it seems that in life there are many times when it feels like we are penalized for doing the “right thing”, Estate Planning can be an exception and it is those who act responsibly and proactively who can stand to benefit the most from proper Estate Planning.
What if I told you that it was possible for you to potentially KEEP all of your hard earned assets and property AND be eligible for Medicaid to pay all of your nursing facility or home care costs?
Not only is this possible but it is my fellow Estate Planning attorneys and I who are able to accomplish this exact thing on a daily basis. Essentially what we are able to do is to transfer some or all of an applicants assets so that the resource level of Medicaid eligibility is met.
Now it is important to understand that there are MANY situations where Medicaid will NOT be available to a client without first exhausting their own assets, and this is almost exclusively a result of a failure to create a proper plan before Medicaid becomes necessary. The good news is that proper Medicaid planning is very rarely an “all or nothing” proposition. Even in the case of someone who has done absolutely zero planning there are ways to potentially preserve some assets while still being accepted into the Medicaid program.
I will add onto this topic in future blog posts but for someone who had absolutely zero idea about the program before reading this I do think you can at least get a VERY basic framework of what Medicaid in the estate planning context really entails.
Of course if you feel that you would like to discuss the program or the eligibility of yourself or a loved one please call me at my office or contact me at the link above to schedule a no obligation consultation.
This was a very interesting article. Thank you so much for your insight!