The Medicaid program is a health insurance safety net for people with very limited financial resources. This program is jointly administered by the federal government along with each state government.
Medicare is another government program, and it provides health care for senior citizens. If you are qualified for Medicare at the age of 65, you will not need Medicaid at first. Plus, you would not qualify if you have resources.
In spite of these facts, Medicaid could become relevant to you at some point in time. This program does pay for long-term care, but Medicare does not pay for long-term living assistance. The majority of elders will someday need help with their activities of daily living, so this is a very pressing elder law issue.
To qualify for Medicaid to pay for long-term care, your countable assets cannot exceed state mandated maximum amount. This would logically lead you to the understanding that you could give your assets to your loved ones to qualify for Medicaid if you ever find that you need long-term care. In fact, you cannot effectively give away assets after you find out that you need care, because there is a five-year Medicaid look-back.
Generally speaking, because of this five-year Medicaid look-back, if you give away assets within five years of applying for coverage, a penalty is imposed. You could not qualify for Medicaid until you served out the penalty period. The length of the period would be tied to the amount that you gave away. To provide an example, if you gave away enough to pay for 18 months of nursing home care, your eligibility for Medicaid would be delayed by 18 months.
Exception to the Rule
When you are first applying for Medicaid, your home is not considered to be a countable asset, so you could qualify while you are still in possession of your home. If you had an adult child caregiver who was living with you in your home for at least two years before you applied for Medicaid to pay for nursing home care, you could give the child the home without violating the Medicaid look-back.
This would provide an added advantage. Medicaid could put a lien on your home after you enter a nursing home, because the program would be required to seek recovery from your estate. The home would not be attached if you were to give it to your child caregiver.
Medicaid Planning Report
We have a valuable resource that you can access through this website if you would like to learn more about how Medicaid can cover your long-term care costs. Our firm has prepared a special report on the subject, and you will gain a solid understanding of the program rules and regulations if you absorb the information that is contained within the report.
The report is free, and you can click this link to obtain your copy: Hartford CT Medicaid Planning.