If you are among the many Americans who go through their entire working years without ever needing to turn to Medicaid for healthcare assistance, you probably know very little about the program. You may, however, find that you do need to rely on the benefits offered by the Medicaid program when you enter your retirement years. As such, it may be beneficial to learn more about the program. With that in mind, the Nashua Medicaid planning attorneys at DeBruyckere Law Offices have put together the following “5 Things You Probably Didn’t Know about Medicaid.”
- Medicaid is a joint federal-state program. Medicaid is a healthcare program that is primarily funded by the federal government; however, the individual states have the option to supplement funding for Medicaid if they choose to do so. This is why you often hear discussion surrounding which states have implemented “Medicaid expansion.” Although the federal government provides oversight for Medicaid, it is administered by the individual states which explains why you will notice differences in the eligibility criteria and benefits offered from state to state. States that supplement the federal Medicaid program typically serve a wider range of people and provide additional services not offered by the basic Medicaid program.
- Medicaid does pay for long-time care, something Medicare does not As a senior you may depend on Medicare to cover most of your health care expenses; however, one thing Medicare will not pay for is long-term care. At an average yearly cost of over $90,000 nationwide, this can be a huge problem for a senior who needs LTC.
- Medicaid has very low income and asset limits. Because Medicaid is a “needs-based” program that is intended to help low-income individuals and families with healthcare expenses, the program uses both income and assets limits when determining eligibility. The income limit is tied to the Federal Poverty Level applicable to an applicant’s household size and geographic area. In addition, an applicant cannot own “countable resources” (assets) valued at more than the limit or the application will be turned down. Depending on which Medicaid program you are applying for, the asset limit could be as low as $2,000 for an individual applicant. If the value of your countable resources exceeds the program limit, your application will be denied and you will be forced to “spend down” those assets, effectively requiring you to rely on your retirement nest egg to pay for healthcare expenses before Medicaid will help.
- Medicaid uses a five-year “look-back” period. Years ago, an applicant could simply transfer valuable assets to a family member immediately prior to applying for Medicaid to resolve the asset limit obstacle. Medicaid now employs a five-year “look-back” rule that prevents such assets transfers. The rule allows Medicaid to review your finances for the 60 month period prior to applying. Any assets transfers made for less than fair market value could result in the imposition of a waiting period before Medicaid will kick in. The way to prevent running afoul of the five-year look-back period is to include Medicaid planning in your estate plan long before you might actually need to qualify.
- Medicaid could still threaten your assets even after you are gone. The Medicaid Estate Recovery Program (MERP) allows states to pursue claims against your estate after your death if the state paid for your LTC through Medicaid while you were alive. Each state has its own set of MERP rules, those most states exempt certain assets under certain conditions. In addition, some states are more aggressive with their MERP program than others; however, you should be aware of the ability to file a claim against your estate and plan ahead for the possibility within your estate plan.
Contact Nashua Medicaid Planning Attorneys
For more information, please join us for one of our upcoming FREE seminars. If you have additional questions about how your estate plan might benefit from the inclusion of Medicaid planning, contact a Nashua Medicaid planning attorney at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.