Unlike Medicare, which is an age-based government insurance program, Medicaid is an income-based program intended to help those who cannot cover the cost of their own medical care. There are restrictions on assets and income for Medicaid that don’t exist for Medicare.
People who previously relied on Medicare may find that they need to qualify for Medicaid if they now require nursing home care or in-home, skilled nursing help. Medicaid will cover these expenses, but Medicare will not.
In order to verify that an applicant qualifies for Medicaid, their application and recent financial history will be subject to scrutiny. The government will look back over multiple years’ worth of financial transactions to determine if someone intentionally diminished their personal assets in order to qualify for Nursing Home Medicaid, which is why early Medicaid planning is the best option for most adults.
Ideally, you begin planning more than five years before you need benefits
When you apply for Nursing Home Medicaid, you will open yourself up to the scrutiny of all financial transactions you’ve made in the last five years, including gifts to your loved ones and transfers into a trust. In other words, if you wish to protect your assets (by creating a Trust etc.) and qualify for Medicaid, the sooner you do so, the better.
Transfers within the 60 month window will likely be subject to a penalty (unless any transfers are deemed exempt transfers). If the transfers are not exempt, you may have to pay out-of-pocket for services that cost the same amount that you transferred or gifted before you can receive any benefits.
The sooner you begin planning (asset protection via Trusts etc.), the less likely it is that you’ll need to worry about any penalties and the more peace of mind you will have about getting access to the care you need and leaving behind a meaningful legacy for the people you love.
Please seek the advice of a knowledgeable Medicaid & Estate Planning Attorney to avail yourself of all options regarding Medicaid (including exemptions that may not be disclosed to you elsewhere).