On our radio program and in our seminars, one of categories of questions we receive most frequently involves Medicaid. This social health care program for individuals and families with limited means has been around since 1965, and it’s true that many changes have been enacted through the years. Yet the level of misunderstanding and misinformation about Medicaid continues to surprise us.
For a good, straightforward primer on Medicaid, we suggest this recently updated article on the website Caring.com. It explains some of the basics of the Medicaid program including what it covers and who qualifies. But be advised that this article is not specific to Washington State, and since Medicaid is a state-administered program, each state has its own set of rules. (We found plenty of detailed information about Washington’s regulations here on the website of the Washington State Department of Social and Health Services.)
Before we dive into this topic, let us remind you from the outset that here at AgingOptions our professional staff members have many, many years of experience in dealing with the twists and turns of Medicaid. Once you’ve read the Caring.com article we’re certain you’ll still have questions, because this is a complex subject. We urge you to contact us, or to attend one of our LifePlanning Seminars so we can answer more of your Medicaid questions in person. You’ll find seminar information at the end of this article.
First, let’s consider the bare bones of Medicaid – what it is and what it does. It’s a federal program, administered by each state, which pays long-term nursing home costs for people with low income and almost no assets. In order to qualify for Medicaid, a person has to be unable to care for himself or herself at home, and he or she has to meet the state’s stringent income and asset requirements. These requirements differ significantly depending on whether the person seeking Medicaid coverage is single or married. Under Medicaid, a person can move into any level of nursing home that will accept them – but as you’ll discover when you start searching, the availability of Medicaid beds is sometimes strictly limited, and you may find far fewer options open to you or your loved one that you had expected.
Some people get confused because they have heard that Medicare also covers nursing home care. This is a misunderstanding based on a partial truth. Medicare does cover some forms of rehabilitative care in a skilled nursing center – for example, if you need to be in a nursing home for a short stay while recovering from surgery. But this coverage is strictly limited, with plenty of restrictions: it typically kicks in only after hospitalization and generally can last no longer than 100 days. By contrast, with Medicaid (unlike Medicare) the patient is not required to have come from a hospital stay in order to qualify, and he or she is not required to be housed in a skilled nursing center. With Medicaid, once a person qualifies and assuming their circumstances remain unchanged, there’s no limit to how long his or her coverage will continue. Medicaid pays the full costs of room and board plus any therapies that are part of resident care, along with other personal services. There are no co-payments to make. For many people who lack other options, the Medicaid program is the only program that allows them to live securely, in relative safety with some degree of dignity, albeit with new frills.
What often disqualifies a person from Medicaid coverage is the simple fact that they have too much money. The rules can get complex, so we encourage you to contact us to review your specific circumstances, but the basic requirement for a single person is that you have no more than $2,000 in total assets to your name in order to qualify for Medicaid coverage. For married people the rules are different: the spouse of the person needing care can have a home, a car, clothing and personal effects and a higher amount of savings on hand. A decade ago when one of our own family members needed to go on Medicaid, her husband was permitted $40,000 in savings and he retained his own Social Security and pension income, but his wife’s Social Security check went straight to the nursing home to help pay for her care. As we said, each situation can be unique and the rules can change from year to year.
If the asset requirements are so stringent, some people still ask, why can’t I simply give my money and other possessions away before claiming Medicaid coverage? The answer is what’s called the Five-Year Lookback. Medicaid will examine your finances once you apply, and if they discover that you have transferred assets any time within five years of your application, coverage will be denied or delayed. The short answer is, you need to prepare ahead of time.
So, will Medicaid be the right solution for you? The answer is, “perhaps” – but with Medicaid, as with all aspects of retirement, it is absolutely essential that you plan ahead. Waiting until you need the coverage before getting your financial affairs in order is a serious and costly mistake. This is yet another area of retirement where you need expert advice – the kind you can count on from the professional staff at AgingOptions. Your best bet is to plan now to attend one of our free LifePlanning Seminars where we go over all aspects of retirement planning: medical needs, including long-term care coverage; financial plans to protect your assets; housing options, to make sure you are never a burden to those you love; the legal protection your estate requires; and how best to communicate your wishes to your family. To register online for the seminar of your choice, click here, or contact us during the week.
Don’t let fear or confusion about Medicaid – or any other aspect of retirement – make you fearful or discouraged. Contact AgingOptions today. You’ll be very glad you did.
(originally reported at www.caring.com)