Planning for long-term care is one of the most an important decisions our client's can make during their lifetime. However, very few people have well defined plans for dealing with related expenses.
Protectecting our Clients Life Savings
Planning for a client’s long-term care is an important decision that most of the population will face one day. In addition, as the quality of health care here in America improves, our lifespan extends and the use of nursing homes becomes more commonplace. That's just one reason why Medicaid planning strategies are getting so much attention.
Many nursing home residents end up exhausting their assets on long-term care. But, with an advisor on top of their game, it doesn't have to be that way. The best time to plan for the possibility of nursing home care is when the client is still healthy. By doing so, they may be able to pay for their long-term care and protect assets for your loved ones.
Over the years, Medicaid planning has become one of the most important elements of a solid financial plan. Your client worked hard all their life to pay off the mortgage and build a comfortable retirement fund. They expected to live off their savings in the comfort of their own home, and planned to leave something to their children at the appropriate time. Suddenly, the unthinkable happens – they suffer a stroke at age 70, and must spend the rest of your years in a nursing home. What will happen to their life savings?
CMS Official Overview
Medicaid is available only to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state law. Medicaid does not pay money to you; instead, it sends payments directly to your health care providers. Depending on your state's rules, you may also be asked to pay a small part of the cost (co-payment) for some medical services.
Medicaid is a state administered program and each state sets its own guidelines regarding eligibility and services. Many groups of people are covered by Medicaid. Even within these groups, though, certain requirements must be met. These may include your age, whether you are pregnant, disabled, blind, or aged; your income and resources (like bank accounts, real property, or other items that can be sold for cash); and whether you are a U.S. citizen or a lawfully admitted immigrant. The rules for counting your income and resources vary from state to state and from group to group. There are special rules for those who live in nursing homes and for disabled children living at home.
Children may be eligible for coverage if he or she is a U.S. citizen or a lawfully admitted immigrant, even if you are not (however, there is a 5-year limit that applies to lawful permanent residents). Eligibility for children is based on the child's status, not the parent's. Also, if someone else's child lives with you, the child may be eligible even if you are not because your income and resources will not count for the child.
In general, you should apply for Medicaid if your income is low and you match one of the descriptions of the Eligibility Groups. (Even if you are not sure whether you qualify, if you or someone in your family needs health care, you should apply for Medicaid and have a qualified caseworker in your state evaluate your situation.)
When Eligibility Starts
Coverage may start retroactive to any or all of the 3 months prior to application, if the individual would have been eligible during the retroactive period. Coverage generally stops at the end of the month in which a person's circumstances change. Most States have additional "State-only" programs to provide medical assistance for specified poor persons who do not qualify for the Medicaid program. No Federal funds are provided for State-only programs.
What is Not Covered
Medicaid does not provide medical assistance for all poor persons. Even under the broadest provisions of the Federal statute (except for emergency services for certain persons), the Medicaid program does not provide health care services, even for very poor persons, unless they are in one of the designated eligibility groups. Low income is only one test for Medicaid eligibility; assets and resources are also tested against established thresholds. As noted earlier, categorically needy persons who are eligible for Medicaid may or may not also receive cash assistance from the TANF program or from the SSI program. Medically needy persons who would be categorically eligible except for income or assets may become eligible for Medicaid solely because of excessive medical expenses.
Direct links to each state’s Medicaid website
District of Columbia