Medicaid Planning

WHAT IS MEDICAID?

Medicaid is a federal and state program that helps cover healthcare costs for individuals and families with limited income and resources. It provides assistance for multiple groups of people, including the elderly, blind, and disabled. In fact, Medicaid pays for over 60% of long-term care costs in the United States. In the context of long-term care, Medicaid will cover the entire cost of care, including room, board, pharmacy, and incidentals, minus a small co-pay in some cases.

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Protecting your assets from a long-term care need can be complicated. That's why working with a professional is crucial to obtaining Medicaid eligibility.

MEDICAID'S COMPLEX REQUIREMENTS

In order to qualify for benefits, you must meet Medicaid’s strict eligibility requirements, which vary by state. Since each state runs its own Medicaid program, it’s important for you to follow the specific rules in your state. But don’t worry—when we connect you with an elder law attorney in your area, they will be well-versed on the Medicaid rules you’ll need to follow.

Fortunately, some basic Medicaid requirements are standard across most states, so we can walk through the basic non-financial and financial criteria.

Non-Financial Requirements:

To meet the non-financial requirements for Medicaid as it pertains to long-term care, you must be:

• A U.S. citizen or qualified non-citizen
• Age 65 or older, blind, or disabled
• Residing in a Medicaid-approved facility

Financial Requirements:

Income
Since Medicaid is a means-based program, your income and assets must be below certain limitations before you can qualify. Again, the specific limitations vary by state. In most states, however, the Medicaid recipient’s income must be less than the cost of the nursing home. With most bills running $8,000/month or more, most seniors easily meet this requirement.

Assets
When it comes to assets, the rules are a bit more complex. A single person can typically keep about $2,000 in countable assets and still qualify for Medicaid. For married couples, however, the ill spouse is limited to the $2,000 allowance in most cases, but the healthy spouse is able to keep a much larger amount. This allowance varies greatly by state but can exceed $100,000 in many cases.

Gifts
Although you might be tempted to simply give away your assets in order to fall below these asset requirements, Medicaid has rules against this. When you apply for benefits, the state Medicaid agency will look back over your finances from the last five years for any gifts or divestments. If they find any, you will be subject to a penalty period of ineligibility based on the amount gifted.