An Introduction To Medicaid Planning and Asset Protection For Nursing Home Care
Everything you need to know about applying to Medicaid
What is Medicaid?
Medicaid is a public program that pays for health care when you cannot afford it. While it can be used to pay for hospital expenses and other medical care, it is also commonly used for long-term care including nursing home stays, assisted living, and at-home care. Nearly two-thirds of all nursing home residents receive Medicaid.
Each state has its own Medicaid program with its own specific rules, benefits, and eligibility requirements, but all states are required to follow certain federal guidelines. Federal law mandates that Medicaid programs cover long-term care, hospital bills, prescriptions, lab fees, transportation to medical facilities, and more.
What is the difference between Medicaid and Medicare?
Though both are government programs assisting people with their healthcare expenses, Medicare is specifically for those over age 65 (plus some younger people with disabilities), while Medicaid is based on financial need at any age. Many people are eligible for both Medicaid and Medicare. Receiving Medicare does not disqualify you from Medicaid.
Am I eligible for Medicaid?
Determining whether you are eligible for Medicaid can be very complex. It requires a careful understanding of your personal finances and your state’s particular Medicaid requirements, which are updated annually. Generally, you must be a U.S. citizen or lawful permanent resident to qualify.
When you apply for Medicaid, a Medicaid caseworker will determine your eligibility based on your finances, including your income and your assets. The lower your income and assets, the easier it will be to qualify for Medicaid.
Income is money you receive on an ongoing basis, such as wages from a job, a pension, Social Security benefits, etc.
Assets can be anything that you own, but not all assets are treated the same. Your caseworker will look at your "countable assets," broadly defined as anything that could potentially be used to pay for medical care (for example, money in your savings account). Everything else (for example, your home or car) is deemed "non-countable," and has no affect on your Medicaid application.
Your caseworker will look not only at your current assets but also any assets you've transferred over the past 5 years (this is called the “look back period”). For example, if you gave a large sum of money to a relative 3 years ago, that "gift" would incur a "penalty period" – a number of months you must wait before receiving Medicaid after applying. The rationale being that you could have used those assets to pay for your medical care.
There are many rules, exceptions, and evolving standards like the above. When applying for Medicaid, professional advice from a Medicaid expert is strongly advised.
How do I protect my family's life savings?
Medicaid was designed with low-income and impoverished Americans in mind. In theory, this means you would only be eligible for Medicaid when your income is low (approximately $2,000 per month or less) and you’ve spent your countable assets to the point that they are almost non-existent ($2,000 in total for a single person).
However, a Medicaid expert can create a strategy to help you and your family protect assets and income while still becoming eligible for Medicaid. This is possible by employing a combination of effective, entirely legal tools designed to bring you within Medicaid requirements before you’ve spent your life savings on healthcare. These techniques include converting countable assets to non-countable, using trusts such a Miller Trust or Pooled Trust, creating a Medicaid annuity, using a powerful tool called the Modern Half-A-Loaf strategy, protecting your home from estate recovery, and more.
A Medicaid expert can explain these strategies in detail, and which will work for you. Here are some of our most effective strategies:
Proximity of care is very important when considering options
Research care options that are nearby when thinking about the next step for your loved ones.
Leona J. Werezak RN, BSN, MN is a registered nurse and adjunct nursing professor. She has 24 years experience working in a variety of healthcare settings including such remote locations as the Arctic Circle. Her research in early stage dementia was published in the Canadian Journal of Nursing Research and re-published in their 40th anniversary issue which showcased exceptional research published since the journal began. Her work in dementia care has also been published in the Journal of Gerontological Nursing. She currently teaches surgical nursing care on a thoracic/vascular unit to baccalaureate nursing students. Her clinical work with nursing students involves extensive work with older adults who have multiple chronic health conditions.