Medicaid is a health insurance program. This program is jointly administered by the federal government along with each state government. The program is in place to provide health insurance for people with financial need. This can lead to the belief that Medicaid is only for the poor, so you may be confused when you hear Medicaid mentioned in retirement planning circles.
Though Medicaid is a need-based program, many people who were never poor seek Medicaid eligibility when they are older. This is because Medicaid will pay for living assistance, and Medicare will not.
Spending Down Assets
To qualify for Medicaid to pay for long-term care, you could engage in a process called a Medicaid spend down. This process is self-explanatory to some extent, but there is often going to be more to it than simply spending all of your assets.
You probably want to leave behind resources for your loved ones to draw from after you are gone. If you feel this way, your spend down could include gift giving.
Many people do give gifts to their loved ones before they apply for Medicaid coverage. To do this with optimal effectiveness, you have to act in advance, because there is a five-year look-back. The Medicaid program evaluators will examine your financial dealings going back five years. If they find that you have given gifts within this interim, your eligibility will be delayed.
The penalty period would be calculated based on the average cost of long-term care and the amount of the gifts. For example, if you gave away enough to pay for 18 months of nursing home care, your eligibility for Medicaid coverage would be delayed by 18 months.
Medicaid Planning Report
You may not be aware of the fact that most people are going to need long-term care at some point in time. In fact, 70 percent of seniors will someday need help with their activities of daily living.
Since long-term care is very expensive, and Medicare will not pay for it, this is an issue that is relevant to all responsible adults who are looking ahead toward their retirement years. Medicaid can provide a solution, but you do have to act in a fully informed manner to take maximum advantage of the program, and the rules are complex.
If you would like to learn more about Medicaid as it applies to the long-term care for seniors, we have a valuable resource that you can access through our website. This report will provide you with a great deal of sound information that you can draw from going forward, and it is being offered to our readers on a complimentary basis right now.
To get your copy of the special report, click this link: Philadelphia PA Medicaid Planning.
To learn more, please download our free Pennsylvania Medicaid Planning here.
Joe Masiuk, Estate Planning Attorney
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