Among other requirements, you must be financially eligible for Medicare benefits. It means that your income or assets should not exceed a specific amount. For example, you cannot be eligible for Medicaid in New York if you have more than $1,563 per month or more in income or assets worth over $28,133.
To be eligible, you must spend down and meet the financial threshold. In other words, you must reduce the value of your assets by spending them down on medical care or other allowed expenses. Once your assets or savings have dwindled to the desired level, you may be eligible for Medicaid.
What are your other options?
Spending down is not the only solution available. You can avoid the spend-down requirement by setting up a Medicaid trust. Since the goal is to reduce the countable assets, transferring assets into the trust can help you achieve this while providing some legal protections.
It can help preserve your family fortune since assets in the trust cannot be sold, moved or transferred to other parties. Eventually, they will pass over to your loved ones.
Understand how things work
A Medicaid trust is not something you set up today and immediately reap the benefits. Creating such a trust should be a long-term plan with eyes on the future because a look-back period applies when assessing such transfers. You may be penalized if you moved assets to the trust within the look-back period.
You do not have to drain your assets to qualify for Medicaid. Therefore, it is advisable to start planning for long-term care as soon as possible to avoid complications in the future. The proper plans will ensure that your healthcare expenses will be covered when the time comes, giving you peace of mind.