Medicaid Planning
Summary
Many of our clients are of an age where they are concerned about health care costs and the consequences of the need for long-term care. It is important that we offer a consistent approach to these clients, and help our clients understand their options.
Important: State laws vary
It is critical to note that state law varies on Medicaid eligibility. It is important that clients consult with their legal professional prior to taking any action in order to make themselves Medicaid-eligible.
Firm opinion on health care planning
Many of our clients are of an age where they are concerned about health care costs and the consequences of the need for long-term care. Of course, the best approach is to assess the need for long-term care insurance before the need arises. Long-term care insurance is the logical first choice. However, some clients will be too infirm to qualify for the coverage or may simply choose not to purchase it, thereby personally assuming the financial risk associated with a potential long-term care stay in the future.
Clients who have significant financial assets may be in a position to absorb future long-term care costs without causing financial hardship; however, for others, the costs could be devastating to their savings. In addition, for married couples, the payment of long-term care costs for one spouse could also severely impact the financial independence of the other spouse. In such cases the client will likely be concerned about spending all of their savings on health care, such as a nursing home. For some people, the only alternative may be a nursing home paid for by Medicaid.
How Medicaid works
Medicaid programs are administered by the states and partially paid for by the federal government. There are two things to consider when contemplating Medicaid. First, to qualify for coverage a person must have only a small amount of assets (generally the family residence does not count). The qualification threshold may be as low as $1,000. Second, if a client has a source of income, such as a pension, or payments from a payout/immediate annuity, they may be required to co-pay some amount. For example, a state may allow a recipient to receive no more than $350 per month. If the person receives $500 from an annuity, the amount above the allowance (in this case $150) must be paid over to the state.
The law will vary from state to state with regard to how a spouse’s assets or income affect Medicaid eligibility for the ailing spouse. It is no longer necessary to impoverish the healthy spouse in order to get coverage for the ailing spouse. However there may be considerable differences between states what assets or income the healthy spouse can have.
There is no substitute for legal advice on Medicaid eligibility. A client can contact the National Association of Elder Law Attorneys for a reference.