Medicare is a government insurance program that serves those who are 65 years of age or older regardless of income.
Medicaid is a government insurance program that serves those of varying ages who qualify based on their income level. To qualify for Medicaid when in a nursing home, an individual can now have $2000.00 in resources. The income limit is under $2,199.00 a month. This is not much money. However, Medicaid it is for the indigent, so the income limit makes sense.
Now that we have that sorted out, many of you have probably heard of the scenario where someone goes into a nursing home and loses everything. It is familiar to hear people say that the government will now take everything they own. So… let’s explore the basics under two scenarios.
First, a loved one falls, is injured, goes into the hospital and then goes to a nursing home. They own a home, a bank account, and some personal possessions. Many think it is all over. Actually, while it’s a tad late for Medicaid planning, an elder law attorney can help make sure assets are spent down to the $2,000 level wisely. For example, a preneed irrevocable funeral can be purchased, different items for the loved one’s room, legal services can be paid for, perhaps even a care givers agreement. In this scenario, planning can help make sure your loved one is secure once they begin receiving Medicaid benefits. Oh yes… the personal possessions like the trinkets and the furniture are not counted as a resource… not unless you own a Mona Lisa!
Second, you are advancing in years, healthy and wish to preserve a family farm/property, different assets for your loved ones, and or the family home. At this stage, planning can help preserve these assets. For example, property can be placed into an irrevocable trust with you retaining a use agreement and or assets can be moved into an irrevocable trust. At this stage, you can move some of your assets to loved one’s well before the Medicaid five year look back period thus preserving some of your family’s treasures or heirlooms. Or if you need some assistance but are managing with the help of a loved one like a child consider a care givers contract to preserve some of your money.
Note: these are generalizations, not legal advice and meant only to illustrate the basics of Medicaid.