If you’re in need of long-term care and can’t afford to pay for either the actual care you need or any insurance or annuity protection, you’ll need to apply for coverage under Medicaid. It’s designed to provide managed care to people who are disabled or age 65 or older and have income and assets that fall below certain federal and state thresholds.
Investopedia’s recent article, “How to Qualify for Medicaid: Tips and Eligibility Requirements,” explains that while Medicaid is federally funded, it’s administered at the state level. Each state also has its own set of rules and regulations for the program. If you’re single, you typically can’t have more than $2,000 worth of cash or other assets outside of your personal residence, vehicle, and other necessary items. If you’re married and your spouse is still able to live independently (known as a “community spouse”), he or she is allowed to keep up to 50% of your joint assets. Your single or joint income usually can’t exceed 133% of the federal poverty level, but several states have thresholds above this.
You’ll also have to prove medically you’re disabled in most cases, although certain exceptions apply. And you must also be either a U.S. citizen or have a green card and prove your residency within the state. However, if your assets or income exceed the state thresholds, you’ll need to reduce your estate. This is known as “spending down.” You might also be able to create a spend-down trust. However, this is non-enforceable by you—and you may lose assets permanently, if the party you gift them to gets into financial trouble.
A frequent reason for people to be denied Medicaid coverage, is incomplete information on the application. Before you start, collect these documents to submit:
- Birth certificate or driver license (to prove your age);
- Proof of citizenship;
- Assets and income documentation;
- Copies of your mortgage, lease, rent payment receipts, utility bills, or other documents that prove where you live;
- Medical records showing your disability; and
- Information about any other health insurance coverage you may have.
You state may require different or additional documentation.
You cannot simply gift your assets or belongings to your children or a reliable friend to use them on your behalf. Before or during the Medicaid application process, consider consulting with attorney who specializes in elder law and thoroughly understands the Medicaid laws in your state. He or she can help you with creating a Medicaid trust or other legal gifting moves that you may be able to make.
Qualifying for Medicaid is not an easy process. Get all of the help you can from a qualified elder law attorney, before you start this process to maximize your chances of acceptance. You should also be ready to drastically decrease the size of your acceptable estate, through a gifting or donation program to meet the eligibility thresholds for your state.
Reference: Investopedia (October 6, 2018) “How to Qualify for Medicaid: Tips and Eligibility Requirements”