When a person is 65 years of age or older and needs health care insurance assistance or cannot afford to pay for medical care at all, Medicaid is there to help. However, to be eligible, there are certain qualifications that a person must meet.
Qualification for Medicaid requires a person’s income or value of assets to be below a certain level, especially when asking Medicaid to pay for long-term care. Having a Medicaid plan in place will help save your assets while ensuring eligibility for Medicaid benefits for long-term care.
How do you qualify for Medicaid?
One of the main reasons why Medicaid is denied is ownership of financial assets or high income. However, there are some assets that Medicaid can excuse. For example, if someone is transferring to a full-time medical or nursing facility, assets still have to be available for the remaining spouse.
Assets exempt from Medicaid eligibility include:
- A home that is valued at up to $840,000
- One automobile
- Prepaid funeral and burial for Medicaid applicant and spouse
- Resources valued up to $75,000 to $120,000
- Monthly annuity income with the spouse as the primary beneficiary
If there is no spouse during long-term care, eligibility requirements are lowered accordingly. A resource value of up to $14,850 will allow an applicant to be eligible for Medicaid, but the home is typically no longer exempt because it is no longer needed during a stay at a healthcare facility or nursing home. All other assets can jeopardize eligibility for Medicaid.
The importance of Medicaid planning
To save your assets and resources but still qualify for Medicaid, it’s important to perform any Medicaid planning at least five years before you may need a long-term care facility and two and a half years before home care Medicaid is needed. Here are some tips to avoid Medicaid eligibility stumbling blocks:
- Acquire long-term care insurance
- Make gifts of cash and assets to family members
- Purchase annuities
- Transfer the title to your house while continuing to hold rights to it
- Establish an irrevocable Medicaid planning trust.
An irrevocable Medicaid planning trust protects any assets placed in this trust from the Medicaid look-back period while determining your eligibility.