What you need to know about Medicaid
Medicaid provides long-term care assistance for people who have exhausted their personal resources and have no other means to pay for their care.
- Provides for both “skilled care” and “custodial care,” but generally, only in a nursing home
- Requires assets to be spent down to meet eligibility requirements.
Medicaid Eligibility Requirements
To be eligible for long-term care benefits under Medicaid, you must meet income and asset requirements. This may require you to “spend down” your assets to a minimum level – typically around $2,000 for an individual. This includes savings accounts and investments, but excludes personal possessions, one care, a limited amount of life insurance and certain other items. Also, if your spouse remains at home, he or she may be able to avoid impoverishment by keeping a portion of the assets you own as a couple.
Medicare Transfer of Assets
There’s a five year “look-back” period to prevent people from transferring assets one day and qualifying for public benefits the next. Any transfer of assets that occurs within five years of the date you apply for Medicaid will trigger a period of ineligibility.
Home Equity Limits
In most states, Medicaid won’t cover long-term care services for people with home equity in excess of $500,000 (states have the option to increase this to $750,000). In all states, the home may be kept with no equity limit if a spouse or dependent relative lives there while you receive Medicaid-provided long-term care services.
Estate Recovery
Medicaid should be considered a loan, not an entitlement. Following your death, your state may attempt to recover from your estate whatever it paid in benefits for your long-term care services under the Medicaid program
1 https://www.congress.gov/bill/109th-congress/senate-bill/1932
2 https://longtermcare.acl.gov/medicare-medicaid-more/medicaid/medicaid-eligibility/financial-requirements.html 2017
How Asset Protection Works
When you own a partnership-qualified long-term care policy, you’re able to protect one dollar of personal assets for each dollar your long-term care policy pays in benefits.
If your long-term care policy pays
$100,000 in benefits
You’re able to protect
$100,000 in personal assets
This is above and beyond the assets you’re allowed to keep in order to qualify for Medicaid.