If you are going to be eligible for Medicare coverage when you reach the age of 65, you may wonder why you would ever want to qualify for Medicaid. These are both government health insurance programs, so you would not need Medicaid if you qualify for Medicare, right?
Plus, Medicaid is a program that is only available to people who have very limited financial resources. You intend to retire with a reasonable store of assets, so you would never qualify for Medicaid anyway.
The above reasoning makes sense, but there is a very good reason why you may want to qualify for Medicaid at some point in time, and it is this: Medicare does not pay for long-term care, but Medicaid will pay for living assistance.
Nursing home care is very expensive, averaging over $90,000 per year nationally, and most seniors will eventually need help with their day-to-day needs. The average length of stay is over two years according to a government survey that was conducted a while back, so the expenses can be considerable.
Medicaid Guidelines
The majority of the nursing home care that is being received by seniors in the United States is being paid for by the Medicaid program. Most of these people were never financially needy, so they qualify by giving assets to their loved ones.
This can lead to the belief that you must impoverish yourself to qualify for Medicaid, but this is somewhat of an overly dramatic assessment, especially if you take the right steps in advance.
First off, we should point out the fact that everything that you own does not count. Your home is not a countable asset, and there is no equity limit if your spouse is remaining at home. Otherwise, there is a $552,000 equity limit in 2015.
Your personal effects and household goods are not counted, and you can retain ownership of one vehicle without forfeiting your ability to qualify for Medicaid coverage. Heirloom jewelry, wedding rings, and engagement rings are not countable, and you can have unlimited term life insurance.
If you need long-term care while your spouse is still healthy enough to live independently, your spouse would be entitled to a Community Spouse Resource Allowance. This would be equal to half of the shared countable assets, but there is a limit of $119,220 in 2015.
This is a brief overview, but even when it comes to countable assets, you could give them to family members, so you are keeping money in the family. You would not necessarily be subjecting yourself to financial hardships, because you would be receiving the care that you need in a nursing home that was being paid for by Medicaid.
Free Medicaid Planning Consultation
If you would like to learn more about Medicaid planning, contact us through this page to set up a free consultation: Southampton PA Elder Law Attorneys.
Joe Masiuk, Estate Planning Attorney
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