Medicaid is a welfare program jointly administered and funded by both State and Federal governments. The Deficit Reduction Act of 2005 increased the restrictions on obtaining coverage particularly when it comes to long term care. Notably, in February 2006 the "look back" period increased from 36 to 60 months.
What is the difference between Medicaid Planning and Medicaid Spend-down?
Medicaid planning is when an individual intentionally and artificially impoverishes himself or herself in order to qualify for Medicaid.
Medicaid planning is not the same as Medicaid spend-down. Medicaid spend-down is when a person spends down his or her assets on their care. Eventually the resource eligibility limit is reached and, assuming all other financial and medical criteria are met, one can expect to qualify for Medicaid.
What are the benefits when one plans for Medicaid eligibility?
Possible benefits include:
*The opportunity to preserve assets for loved ones and heirs.
What are the risks when one plans for Medicaid eligibility?
Possible risks include:
*The regulations and/or case law governing Medicaid may change to become more restrictive. *An irrevocable transfer of assets is just that. Once the money or property is given away there is nothing to compel its return. *A Medicaid eligible individual loses choice. There is nothing to guarantee when or if a Medicaid "bed" will be available at a particular facility when needed. *The Medicaid eligible individual loses independence. The County and the State determine the type, level and provider of care an older adult receives. *Despite good planning the government has the right to "estate recovery" and may seek reimbursement of benefits paid on a Medicaid recipient's behalf. *If anything is remiss when planning for Medicaid there is the possibility of disqualification.
Questions for your Medicaid planning advisor:
Life Management Resources does not help with Medicaid planning. We DO help our clients and their families identify, gather information (including documenting spend down), and facilitate the application process for all types of benefits, including Medicaid.
Should you hire an advisor to help you plan for Medicaid eligibility we've included the following suggested questions for you to ask him or her when interviewing.
1. Do you guarantee Medicaid eligibility?
2. Can you provide tax and estate advice for both the applicant and the receiver of any gift transfers?
3. What happens if they change the Medicaid regulations and I need the money or property after I make the transfer?
4. If I transfer my money and property to my children how can I be sure that they will use the money for my care? What if we create a large period of ineligibility by transferring assets but I become ill soon after. Who will pay for my care if I'm not eligible for Medicaid but my children no longer have the funds?
5. How do I know I will get a bed in the assisted living facility or nursing home of my choice? Will I have my own room at the assisted living or nursing home?
6. What if I want more care than Medicaid will provide? How will I pay for this care if I've transferred my assets?
7. I want to age in place. Will Medicaid arrange for 24 hour care in my own home or must I move to a nursing home if my care needs so warrant?
8. What if my family doctors and specialists don't accept Medicaid as a form of payment? Once I become eligible for Medicaid, should I ever need rehabilitation or therapy can I choose where and from whom I want to receive these services?