If your parents are getting older, you may have concerns about their healthcare and financial security. They may be eligible for medical coverage through the federal government’s Medicaid program.
The process of qualifying for Medicaid can be complex and requires careful planning.
Understand Medicaid eligibility requirements
Income and assets determine Medicaid eligibility. In general, your parent’s income and assets must fall below a certain threshold to qualify for Medicaid. Familiarize yourself with the specific criteria in your parent’s state. For example, a single person aged 65 or older must have an income of less than $11,208 per year and no more than $16,800 in assets.
Create a budget
Help your parent make a detailed budget that documents their income, expenses and assets are well-documented. This step will help you identify any financial gaps they must address to meet Medicaid’s requirements.
Protect their assets
If your parent’s assets exceed the Medicaid threshold, you can use legal estate planning strategies to retain some property. For example, you can help your parent transfer assets to a trust or make essential home modifications. These steps can exempt the home from counting toward Medicaid assets during the application process.
Prepare in advance
Medicaid has a look-back period, which means it evaluates any recent asset transfers. Preparing to apply well in advance allows your parents to protect their assets and avoid penalties.
Review the plan frequently
Medicaid planning is not a one-and-done process. The rules and regulations can change, and your parent’s financial situation may evolve. Reviewing their plan and adjusting regularly keeps them in compliance with the program’s requirements.
Gather documentation
Accurate records are key to a successful Medicaid application. Help your parent gather the necessary financial statements, medical bills and other documents required to demonstrate their eligibility.
Your support can help your parents navigate the process and secure the healthcare coverage they need as they age.