WHAT IS MEDICAID PLANNING?
Mary’s husband recently went into a nursing home and she was approached by the social worker who inquired of her financial information and how she intended to pay for her husband’s care. It was over $8,000.00 per month. The case worker asked if Mary was going to apply for Medicaid. Mary was very confused so she went to see a qualified elder law attorney. The attorney explained to Mary that Medicaid is a government program to help pay for nursing home costs, but to qualify, Mary had to meet certain income and asset restrictions. Mary was confused even more. She told the attorney she was already on Medicare and that she didn’t know why she had to do anything, why wasn’t Medicare paying. Again, the attorney explained that Medicare is health insurance for individuals over 65 or who have been disabled for two years. Medicaid, on the other hand, is a social program to pay for people with insufficient assets or income to pay for proper health care, including nursing home care.
Mary didn’t know what to do. She didn’t think she had the money to pay for her husband’s care, but the attorney explained she wasn’t currently eligible for Medicaid benefits because she had too many assets to qualify (she had a $100,000 home and $300,000 in other assets). But, the attorney explained, there are two separate steps to receive Medicaid benefits for her husband. First, the planning. Medicaid planning centers around the legal and financial decisions to get Mary’s assets and income to the acceptable limits to qualify for Medicaid. The attorney explained several legal strategies, including the use of certain types of trusts. Mary would retain control and use of her assets but she would have to give up some right to them. Mary again was beginning to get confused. It all sounded so complicated. Fortunately, the attorney was quickly able to explain to Mary that he could protect her house plus about $200,000 of her assets and her husband would qualify for Medicaid benefits in about fifteen (15) months (not 60 like Mary had heard). Mary would have to pay about $100,000 of her husband’s costs but Medicaid would pay after that if she began the planning. Mary was disappointed she had to pay some but was thrilled that most of what they had worked for was going to be protected.
Finally, the attorney explained the second step to receive Medicaid benefits is the qualification process. A separate Qualification process for benefits is required after the fifteen (15) months was over. The attorney explained, that if necessary, he could be retained separately to assist Mary with the filing of the application for Medicaid benefits with the local Medicaid department to ensure Mary’s husband actually begins to receive the benefit. Mary was finally able to distinguish the two steps to ensure care for her husband and protect their lifetime of savings. Medicaid planning, to get her husband eligible for Medicaid in the future and applying for the benefits from the local Medicaid Department. The attorney clarified the second step would not be necessary if her husband came home from the nursing home prior to the fifteen (15) months or if he passed away from his condition. Mary was relieved to know she had begun a plan to ensure for her husband’s care and protect their lifetime of earnings. Mary also learned that Medicaid planning is always better if you plan in advance, but, even though she waited until a tragedy, there were still options.