The Medicaid program is a health insurance safety net for people who have very limited financial resources. If you can prove that your resources are within Medicaid income and asset limits, you can qualify for the program, regardless of your age.
Medicare, Medicaid & Senior Citizens
Medicare is also a government health insurance program. Unlike Medicaid, Medicare is for the most part intended for senior citizens. (It should be noted that some people with disabilities who are not seniors qualify for Medicare coverage.)
The vast majority of seniors will qualify for Medicare because of the fact that you pay into the program when you are working and paying taxes. You earn retirement credits when you pay your taxes. It is possible to earn a maximum of 10 credits per year.
In 2014, you earn one credit for every $1200 in qualified earnings. Using this figure, if you made at least $4800 for a minimum of 10 years, you would qualify for Medicare when you reach the age of 65.
Medicare is certainly going to help a great deal when you are a senior citizen, but it does not pay for everything in its entirety. There are out-of-pocket costs that you must absorb as a benefit recipient.
The costs are relatively modest, and they are not backbreaking for most people. However, there is one thing that Medicare will not pay for that is extremely expensive: long-term care.
Medicaid will pay for long-term care. You may be surprised to hear that Medicaid actually pays for most of the long-term care that is received by elders in the United States. Many of these people once qualified for Medicare.
Because of the upper resource limits, you could qualify for Medicaid to pay for long-term care after you have spent virtually everything that you have paying for the care yourself.
This is one option, and it is not a very appealing one.
When you understand the lay of the land, you may wonder if it is possible to give away your assets to your loved ones in advance of applying for Medicaid to pay for long-term care. The answer is yes, as long as you act well in advance.
You have to act early because of the five year look back. The Medicaid program will look at your financial dealings going back five years. If you have divested yourself of assets within this time frame, your application will be denied at first. Your eligibility will be delayed for a prescribed period of time that will be calculated based on the amount of the divestitures.
How long is this penalty? To explain by example, if the amount that you gave away would have paid for two years of long-term care, your eligibility would be delayed for two years.
Medicaid Planning Consultation
If you have detailed questions about Medicaid planning, contact us to schedule a free consultation.