Maybe you have heard the term Medicaid planning and wonder exactly what it means. If you are growing older, caring for a spouse needing long-term care, or starting to care for your aging parents, you may need to learn more about Medicaid planning.
There is no strict definition of Medicaid planning. It refers to using available services to plan and prepare for applying for Medicaid.
The importance of starting early
There are many reasons to engage in Medicaid planning early. You might find you do not meet the income limits to qualify for Medicaid, or your available assets are over the limits, and you need to spend down or convert assets to qualify. This process can take time and preparation.
Qualifying for Medicaid is often a complicated process. Benefits can be denied for minor reasons, such as not receiving a document in time or accidentally entering the wrong information in an application.
While you can appeal a denial and sometimes get the denial overturned, this only increases the time you must go without benefits.
The purpose of Medicaid planning is to create a situation where you have the best chance of qualifying for Medicaid with no roadblocks that can delay the process.
This is important because Medicaid provides many benefits, one of which is ensuring you or your family members receive long-term care at an affordable cost. It also helps preserve certain assets for your family members or loved ones and allows a healthy spouse who remains at home to be financially secure.
First steps in the Medicaid planning process
Medicaid planning typically involves the help of multiple professionals, including an elder law attorney. If you are the one who will be applying for Medicaid, the process usually starts with a review of your financial resources and health status.
This process can take several weeks. After this review, you will know your likelihood of qualifying for Medicaid.
If your situation shows that you will likely not qualify for Medicaid, it is time to explore options to help you become eligible.
These can include setting up certain types of trusts, spending down assets, or, in some cases, a Medicaid-qualifying annuity used to convert a countable asset into income for the community spouse.
Protecting your home
Learning how to protect your home is another aspect of the Medicaid planning process. Many Medicaid applicants are unaware that their homeownership could be at risk if they receive Medicaid benefits.
After you pass away, Medicaid is repaid for the benefits they provide. The State can pursue reimbursement through various options, including inserting a lien on your home or seizing assets from your estate, to collect.
Medicaid planning can help you protect your interest in your home by using sibling or child caregiver exceptions if the facts of your situation allow.
Medicaid planning can help you avoid mistakes or pitfalls that would cause you to be ineligible for coverage. The time and effort put into Medicaid planning is often worth it. Preparing early is a wise choice.