Medicaid is a government health insurance program that will pay for long-term care. Because it is a need-based program there are upper asset limits. You cannot qualify if your countable assets exceed $14,550.00 in value.
Medicaid may not seem relevant to you if you expect to qualify for Medicare coverage as a senior citizen. Medicaid and Medicare do pay for many of the same types of medical expenses, so this is not an unreasonable assumption.
However, Medicare won’t pay for long-term care. This is why Medicaid is relevant to senior citizens. Because of the fact that long-term care is so expensive, Medicaid actually pays for most of the long-term care that is received by seniors.
How can you qualify for Medicaid if you are not poor? The answer is that you could spend all of your money paying for long-term care. You would then have less than $2000 in countable assets. At that point you could qualify for Medicaid to pay for the remainder of your care.
This is one possible course of action. There is another that you may want to consider.
Medicaid Planning and the Five Year Look Back
Because of the circumstances that exist with regard to these government health insurance programs and long-term care, people often plan ahead in advance with Medicaid eligibility in mind.
You could use all of your savings paying for long-term care and then qualify for Medicaid after you are broke. On the other hand, you could give this money away to family members. You would then have less than $14,550.00 in assets if and when you apply for Medicaid.
The fly in the ointment as it were is the five year look back. If you give away assets within five years of applying for Medicaid you are penalized. You will not be eligible for Medicaid coverage for a particular period of time.
The length of this penalty is calculated by comparing the cost of long-term care in the state of New York to the amount of money that you have given away.
How Likely Is It?
Everyone should give this matter some thought. According to the United States Department of Health and Human Services, the majority of Americans will someday need long-term care.
People are living longer and longer lives. Once you reach the age of 65 it becomes statistically likely that you will live into your 80s.
The truth is that most people are going to need assistance with their day-to-day needs at some point in time. It is not a long shot; it is a probability.
Given the fact that the cost of a year in a nursing home in the state of New York averages over $140,000 this is a serious matter. Medicaid is the solution for many, but you must plan ahead effectively to preserve a maximum store of assets for the benefit of your family.