Many people may have significant assets and income, but not enough of either to cover the cost of extended long-term care. We help clients to qualify for Long-Term Care Medicaid without losing everything for which they have worked for their entire lives.
The Difference Between Medicare and Medicaid
- Medicare is not based upon financial need; it is available to those deemed disabled by the Social Security Administration or those age 65 or older.
- Medicare only covers acute care; it does not cover chronic care.
- Medicaid is based upon financial need.
- Medicaid is a payer of last resort for chronic care.
Focus on Financial Planning
Good financial planning within the limits set by the Medicaid Rules is crucial in order to preserve as much of a client’s assets as possible, and along with that the client’s freedom of choice, sense of control and dignity.
Gifting of Assets and Consequences
Under certain very strict circumstances, transfers of assets to family members are allowed; but for any disallowed transfers occurring within the Lookback Period, a transfer penalty will be assessed by the State Medicaid Agency.
- The Lookback Period is the five (5) year period before the date an applicant otherwise qualifies for Long-Term Care Medicaid.
- A disallowed transfer is anything given away for less than its fair market value which does not meet an exception
- Disallowed transfers can sometimes be cured.
“Countable” versus “Excluded”
- In Long-Term Care Medicaid, assets and income are considered either “countable” (meaning deemed available for long-term care needs) or “excluded” (meaning not deemed available for long-term care needs).
- The liquidity of an asset is irrelevant in determining whether it is countable or excluded
- The form of an asset, the source of the income and the recipient of the income are very important in determining whether it is countable or excluded.
- We frequently work with financial professionals to advise on what options for a client’s investments are permitted under the Medicaid Rules; within this framework, clients and financial professionals can choose which options are best for the clients.
Aimee Cardinal, Estate Planning Coordinator and Paralegal