As we age, a vast majority of us will require long-term care at some point in our lives. Long-term care may be provided in residential facilities or in the comfort of one’s own home, and includes services required to assist elderly Americans with everyday tasks such as eating, dressing, bathing, and toileting.
Medicaid is a program provided by State and Federal Governments in order to assist Americans with paying for health services and nursing home costs. Depending on what state you live in, Medicaid my also cover long-term care costs for care received within your home. Medicaid, however, is a need-based program. In order to qualify for Medicaid, citizens need to meet the asset and income-level requirements for their state.
Because Medicaid is a need-based program, many people utilize some form of Medicaid planning to attempt to qualify for coverage. Medicaid planning is simply a method of organizing your assets and income so that they are inaccessible to you. If your assets and income are inaccessible, the state will not count them when determining whether you are eligible for Medicaid benefits. The benefits of Medicaid planning include sheltering your countable assets, preserving assets to pass on to your loved ones, and providing for your spouse.
Medicaid planning can be risky, however. Importantly, each state has a look-back period. Assets transferred during the look-back period may be counted when determining whether an individual qualifies for Medicaid coverage. Therefore, poor Medicaid planning can lead to a person not being able to access his or her assets, and being disqualified from Medicaid coverage.