How Do I Qualify Financially For Medicaid?
Provided you meet the health requirements, Medicaid (“Medical Assistance”) will usually pay for your care if you have no assets or money. If you are in a nursing home, Medical Assistance will cover room and board, pharmacy and incidentals. While Medical Assistance will provide for your basic care, unfortunately it does not cover certain expenses, like haircuts, hearing aids, and clothing. You are allowed to retain eighty-four ($84) dollars per month from your pension / social security for these expenses.
The best time to perform Medical Assistance planning is before you enter a nursing home. Planning ahead will help to allay your concerns over the high cost of long term nursing care. Generally, the purpose is to enable you to be eligible for Medical Assistance, while preserving as much of your as possible, so that you can pass them down to loved ones. If you plan before you enter a nursing home, there are several options for preserving your assets which include: long term care insurance, gifting, and trusts.
Many people, unfortunately, do not plan ahead because the majority of seniors are of the opinion that they will never enter a nursing home. Medical Assistance crisis planning occurs when you have already been permanently placed in a nursing home and you are paying out of pocket for your care. Medical Assistance crisis planning is more common. When the nursing home stay becomes a reality, you or your family, realizing the cost of nursing home care, will have to address the situation.
To qualify for Medical Assistance, you must be over sixty-five, or blind/disabled and have limited income and assets. If you are a single person, the only assets that you can maintain (non-countable assets) are basically, twenty-five hundred ($2,500) dollars, some life insurance and your burial plot. Every other asset is considered available to pay for the nursing home costs (countable assets). Non-countable assets for a married couple are some savings, your home, household goods, a motor vehicle, some life insurance and burial plots. Savings accounts, checking accounts, 401K, pensions and CD’s, life insurance policies, in excess of the non countable allowances, second homes, and other motor vehicles are all considered countable assets. Therefore, if you have assets in excess of the resource limitation, you will not qualify for medical assistance. Consequently, you must “spend-down” the excess amounts.
In lieu of giving all your money to the nursing home, you can “spend-down” your assets, with some proper planning techniques such as: purchasing prepaid funeral arrangements, paying off some debts, purchasing a new car and making home improvements. Additionally, the remaining “spend-down” amount can be eliminated through the purchase of a Medicaid Annuity. The Medicaid Annuity is designed to convert the “spend-down” amount into a stream of income. With the “spend-down” amount now eliminated, you become eligible for Medical Assistance benefits.