Most people are aware of the fact that Medicaid is a government health insurance program that is intended for people with significant financial need.
As you go through life working and paying taxes, part of what you pay goes toward future Medicare coverage. Medicare is a government health insurance program that is largely for senior citizens.
If you have Medicare coverage, you would not need Medicaid at first. Plus, you probably wouldn’t qualify because of the asset and income limits.
However, Medicaid becomes very important for a significant percentage of elders. This is because Medicare will not pay for long-term care, but Medicaid will.
Help with your activities of daily living is considered to be custodial care rather than medical care or convalescent care. Medicare helps with medical costs, and it will pay for up to 100 days of convalescent care, but it doesn’t cover custodial care.
Medicaid Asset Limits
For a single individual, the asset limit for Medicaid coverage is just $2000 in most states. However, some of your property does not count when Medicaid is determining your eligibility.
You can maintain possession of your home, but there is an equity limit. In the state of Pennsylvania, the equity limit is $543,000 in 2014.
It should be noted that there is no equity limit at all if a healthy spouse is remaining in the home while his or her spouse is entering an assisted living facility.
Your vehicle is not considered to be a countable asset, and your heirloom jewelry, your wedding ring, and your engagement ring would not be counted. Under Medicaid regulations, you can have a life insurance policy valued at up to $1500, and you can have $1500 saved for funerary expenses.
If you retired with a reasonable store of resources, you would not be able to fit within these parameters. In spite of this, most of the long-term care that is received by seniors is being paid for by the Medicaid program.
It is possible to give assets to your loved ones before you apply for Medicaid. This is typically referred to as a spend down. You would then have little left in your own name, and you could obtain eligibility.
The tricky part is the 60 month look-back period. You have to complete your spend down at least five years before you apply for Medicaid, or you will be penalized, and your eligibility will be delayed.
It takes careful and informed planning to take all the right steps along the way.
Free Medicaid Planning Consultation
If you are concerned about future long-term care costs, our firm can help. We offer free consultations, and you can send us a message through this page to request an appointment: Southampton PA Elder Law Attorneys.
Joe Masiuk, Estate Planning Attorney
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