Medicaid Planning: Are You Prepared?


As you get older, the possibility of disability increases. But are you prepared on what to do if you or a loved one becomes disabled? Planning for disability, more often than not, involves the coordination of financial and legal solutions including Medicaid planning — an often misunderstood topic.

What is Medicaid?
Medicaid is a federal government program that provides financial assistance to persons age 65 and over, or those under 65 who are disabled and in need of substantial medical assistance. Different from Medicare, Medicaid is a needs-based program in which a person must have a medical need for the assistance and must be of limited financial means before he or she may qualify.

Medicare is health insurance available to all persons over age 65 who qualify for Social Security, as well as those who are under 65 and who the Social Security Administration determines disabled. Medicare unlike Medicaid will not pay for nursing home, assisted living or home health care on a long-term basis.

With the rising costs of long-term care, many people cannot afford to pay privately for home health care, assisted living, or nursing home care, and with the national average cost of in-home care between $17 and $19 per hour, 69 percent of single people and 34 percent of married couples will exhaust their assets after 13 weeks in a nursing home. These statistics show how crucial Medicaid planning is.

What is Medicaid Planning?
With the collaboration of legal counselors, financial planners, CPAs and insurance professionals, planning can assure Medicaid qualification by either spending down or protecting a person’s assets to meet the financial criteria. Medicaid rules differ from state to state; however, legal counselors and financial planners can help with the transferring and disposing of assets as well as the purchase of financial products.

For those who choose to plan early, and have not begun to spend assets on private care, the use of irrevocable trust combined with life insurance and/or long-term care insurance can provide optimum asset protection. Pre-planning proves to be the most beneficial for individuals; however, individuals who are in crisis planning may still have significant opportunities — such as gifting assets.

With the rising costs of long-term care and the possibility of disability, Medicaid planning is critical. Plan now to protect your assets now.

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