- March 17, 2019
- Bott & Associates
- 0 Comments
Estate Law Lawyer Rolling Meadows, IL
More and more Americans are worried about long term care. With life expectancies being longer than expected, it is more and more difficult to pay for care in our senior years. People work so hard, sacrifice so much, to accumulate the nest egg that they believe will carry them for the rest of their lives. However, when a person is diagnosed with diseases such as Dementia, Alzheimer’s, Multiple Sclerosis, ALS, and other debilitating diseases, the panic revolves around who is going to take care of me, and how will I pay for it? The myth in many people’s minds is the State will take care of them. Unfortunately, that is not always the case. Below are the five things you need to know about Medicaid.
- Medicaid is a joint Federal and State program. Medicaid is primarily funded by the Federal government. But it is up to each state to administer the program. Some states supplement funding for Medicaid, and that is considered “Medicaid Expansion”. Each state has its own rules as to eligibility criteria and benefits. Some are easier to qualify for, and others are much more difficult. Therefore, it can be a consideration when discussing where to retire in the future.
- Medicare vs. Medicaid. Often people are confused as to why long-term care is not covered by Medicare. They often think that Medicare covers everything after reaching age 65. This is not true. Medicare only covers your health care needs, for illnesses, hospitalizations, etc. Once you are in a rehab facility after you are discharged from the hospital, Medicare may pay for some of your days in that facility, depending on how well you are improving during the rehabilitation process. Once you max out the days paid for by Medicare, typically 120 days, then it is up to you to pay for additional days in the facility.
- Medicaid has low income and asset limits. The Medicaid program uses both income and asset limits to determine eligibility. Typically for a single person, you can only have $2,000 in assets. The income limit is tied to the Federal Poverty level applicable to the household size and geographic area. If a person has assets beyond the $2,000, then you are forced to “spend down” the assets until you have reached the level.
- There is a 5 Year Look Back period. Often people think they can gift their assets to their children in order to qualify for Medicaid. What they don’t know is that there is a 5-year look back for qualification. Your application requires 5 years’ worth of financial statements to be reviewed by the State. If they see any transfers during such time, then you will be disqualified for Medicaid, or at least have a waiting period before being qualified. You can do Medicaid Planning prior to needing long term care, as long as the planning begins at least 5 years before the need.
- The State may recover your assets upon your death. The Medicaid Estate Recovery Program allows states to recover assets or place liens on real estate after your death, if Medicaid paid for your care during your life. So although your residence is typically an exempt asset for purposes of qualification, it can be taken away from your children, upon your death. Again, Medicaid Planning way ahead of the need, can help prevent this from happening.
Planning ahead is the key. Although estate planning with Wills and Trusts are very important, it’s even more important to start thinking about long term care. Seek a qualified estate law lawyer Rolling Meadows, IL trusts to discuss what options are right for you.
Contact Bott & Associates, Ltd. for their insight into estate planning and Medicaid.