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Medicaid is one of the three ways to pay for long-term care, and it’s the best option for many folks. If you’re planning to use Medicaid as your long-term care plan, there are some things you should know ahead of time. In this week’s episode, John shares his expertise in Medicaid planning.
Medicaid is a federal program, so the rules are created by the federal government, but Medicare’s services are administered by each state’s agency. What you end up with is a set of big federal rules, but as each state takes those rules and creates some interpretations of how they think those federal rules are supposed to be administered, then you can end up with some variations from state to state. As a general rule, a state can not make a federal program more restrictive than the federal rules will allow, but they can make a federal program less restrictive than the federal laws allow.
If Medicaid is your long-term care plan, you need to understand Medicaid before you need to access those benefits.
What is the right way to qualify for Medicaid for long-term care expenses?
Medicaid eligibility looks at income and assets.
There is a cap on monthly income. The income limit varies by state, and there are other things that factor into the income limit. In most cases, the income limit is not the bigger problem.
There is also an asset limit – how much stuff you can own while still being eligible for Medicare. Not all assets are a factor in Medicaid eligibility. Certain assets are protected, including:
- your home (in most cases)
- a vehicle, or perhaps two vehicles
- irrevocable prepaid funeral policies
- certain business equipment
After those non-countable assets, your assets must be less than $2,000. That’s basically broke! What, if anything, needs to be done with assets now to possibly protect these assets down the road.
The one thing that is not generally recommended is just gifting assets. You don’t want to expose your assets to someone else’s problems. But there many things that you CAN do…
Next week: crisis planning. Please join us for the next episode of Big Picture Retirement, where we’ll talk about how to plan when you’re in a more urgent situation.
What are the ethical considerations about using a government program to pay for long-term care?
How does Medicaid pre-planning differ for married couples vs. single people?
The day and time of the month where Medicaid eligibility is determined
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Every few weeks, Devin and John answer reader questions during the show. Send your questions to firstname.lastname@example.org.