Medicaid Can and Will Pay for the Entire Cost of Long-Term Care
If your loved one is seeking long-term healthcare for end-of life needs, if assets are managed correctly, even in a crisis moment, Medicaid will pay for the entire cost of the nursing home stay.
The key is to accomplish this without becoming financially destitute. Below is a list of the most heard fears, concerns, and untruths about Medicaid. Those who impart these myths either don’t understand how to navigate within the system or are misinformed. Let’s dispel these myths for the last time!
My parents have Medicare, so they won’t need Medicaid.
It’s important to remember that Medicare is not Medicaid. Medicare is a government health program that acts as major medical insurance for U.S. citizens ages 65 or older. (Some disabled people meet the criteria and qualify at a younger age.) Medicare covers hospital expenses for those who qualify, and additional, optional Medicare programs will cover doctor visits and prescription drugs. Medicare will cover only the first 20 to 100 days of extended care before private-pay, long-term care insurance, or Medicaid must take over.
The person in need of care has long-term care insurance; therefore, Medicaid isn’t needed.
Great! Long-term care insurance is a wonderful purchase. Depending on the type of coverage purchased, however, it may or may not cover nursing-home care. It’s critical that you read the fine print and determine what it will and will not pay for.
I can take care of my loved one in need of care.
It may be unrealistic to assume this responsibility. Most families today no longer live in close proximity to one another. It’s common for adult children to live several hours away, or even in a different state—or country—from their parents or relatives. It’s always safest to plan for the worst and hope for the best. If you can physically and financially assume responsibility for your parents’ or loved one’s long-term care, they are extremely fortunate. But as their health declines, they may need more than you can give.
A person must “go broke” before he or she can apply for Medicaid and qualify to stay in a nursing home.
This is one of the biggest myths. Those who “go broke” by spending down their assets to apply for Medicaid do so based on misinformation. What they do not realize is that an expert eldercare attorney or an estate-planning attorney could have reallocated their assets and legally navigated within the system to preserve a financial legacy for their spouse, children, grandchildren, or favorite charities, while still enabling them to qualify for Medicaid benefits for nursing-home care.
The government took my parents’ or loved one’s house when they went into the nursing home.
The government doesn’t take away people’s houses. The family did not title the house properly, which left it exposed and available for the government to use to recoup its Medicaid financial outlay, in states that allow this.
Medicaid – Just theFacts! Here are the straightforward requirements for qualifying for Medicaid assistance.
To be eligible for Medicaid, you must be:
- A U.S. citizen
- A U.S. citizen
- Disabled or age 65 and older
- Able to meet an income “means” test
- Considered medically needy and in need of assistance
Under the current rules, most middle-class seniors don’t automatically qualify for Medicaid. In most states, people must “spend down” their assets until they are considered poor, or “financially needy,” to be eligible for Medicaid. There are, however, legal ways to reposition assets to qualify for Medicaid while preserving some financial assets for loved ones. People don’t have to become destitute or broke.
Medicaid considers the assets and income of both spouses when one or the other seeks nursing-home benefit payments.
Countable assets include:
- Cash, savings, and checking accounts
- Real estate (other than the primary residence)
- More than one vehicle
- Recreational vehicle
- Mutual funds
- Credit union share and draft accounts
- Certificates of deposit
- U.S. savings bonds
- Pension plans
- Individual retirement accounts (IRAs)
- Keogh plans
- Nursing-home trust funds, prepaid funeral contracts that can be canceled, trusts (re:terms)
- Tax-deferred annuities
- Promissory notes
- Cash value of life insurance
- Uncashed checks
Non-Countable Assets Include:
- Primary residence
- One car/vehicle that is titled in the person who is in need of care’s name
- Household effects
- Personal jewelry and clothing
- Prepaid funeral or burial account
- Value of life insurance if face value or cash is $1,500 or less
- Irrevocable Funeral Plan (insurance, trust, and or both)
- Term life insurance policy
- Medicaid SPIA
Other kinds of assets may be either countable or non-countable, depending upon how your state has categorized them. Your state Medicaid office can provide the exact lists it uses to categorize assets.
In Closing…Something to Think About
One out of nine U.S. citizens is over the age of sixty-five. This is an estimated 38.9 million people. Of those 38.9 million people, approximately 1.3 million are receiving care in a nursing-home facility and this number is growing daily. Within the remaining non-institutionalized segment of those individuals aged sixty-five and over, 24 percent are in poor health and living at home and 6.4 percent are currently receiving some form of care within the home. These statistics will only dramatically increase as time goes on. (From the Centers for Disease Control and Prevention: www.cdc.org.)