Medicaid is a government program that ultimately becomes very relevant to a high percentage of senior citizens. Why would Medicaid be important to you when you are going to be qualified for Medicare coverage when you reach the age of 65? This is a very good question.
Long-Term Care & Medicare
Medicare is a health insurance program for senior citizens who qualify. You become eligible for Medicare by earning at least 40 retirement credits over the course of your lifetime. You can earn up to four credits per year, and the earning requirements are minimal. Therefore, most people who have worked throughout their lives do in fact qualify for Medicare coverage.
You may be lulled into a false sense of security when you recognize that you will be qualified for Medicare as a senior. Medicare does not cover everything in full. There are out-of-pocket expenses for covered forms of care and treatment, and you should be aware of these costs and budget ahead appropriately.
These premiums, deductibles, and co-payments can be absorbed by most people, but there is a big gap. Medicare will not pay for long-term care at all. This is the type of care that you would receive in a nursing home or assisted living facility.
The Medicaid Solution
Medicaid is a government health insurance program that will pay for long-term care. This is why so many senior citizens ultimately enroll in the Medicaid program.
Medicaid is a needs-based program. To be able to qualify, you must stay within certain income and asset limits. If you have countable assets that exceed $2000 in value you can’t qualify.
People typically qualify for Medicaid through the implementation of a Medicaid spend down. This is somewhat self-explanatory: you spend or give away your assets until you have very little left. It is then possible to qualify for Medicaid to pay for long-term care.
Five Your Look Back
Now that we have provided the necessary background information, we can examine the five year look back. If you find out that you need long-term care today, you generally cannot give away your assets tomorrow and apply for Medicaid the next day. The Medicaid program will examine your financial transactions going back five years.
If you have given away assets within five years of applying for the program, you may be penalized. Your eligibility may be delayed. The duration of the penalty will be determined based on the average cost of long-term care in the state within which you reside as it compares to the amount of your divestitures within this five year look back period. Careful planning can reduce or eliminate the delay in qualification.
Medicaid Planning in Charlotte: Free Consultation
Because of the Medicaid look back, you must plan ahead in advance if you intend to rely on Medicaid to pay for long-term care. If you would like to discuss the matter with an elder law attorney, contact us to schedule a free consultation.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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