Adults who have saved for retirement or worked consistently to earn a pension may dismiss the idea that they need to plan for Medicaid benefits. They may assume that a combination of their resources and Medicare coverage might be enough to cover their care costs.
They may quickly reject the suggestion that they need to perform Medicaid planning to help them obtain benefits quickly if they need them later in life. People may assume that they can take the necessary steps to get the benefits and support they require for stability and comfort in their golden years when the need arises.
Unfortunately, people who fail to plan in advance may not fully understand the consequences. Relying on Medicaid for long-term care needs might ultimately diminish what loved ones inherit from an individual’s estate after they die.
Medicaid recovers what it pays whenever possible
Medicare is a benefit people earn through employment. Medicaid is different. People become eligible for Medicaid based on financial need. The state looks at their current income and their countable assets. Certain resources, like home equity, do not count against individuals when they seek Medicaid benefits.
However, those assets might then be vulnerable after the Medicaid recipient eventually dies. The Medicaid estate recovery program is a state-based program that pursues claims in probate court to recover the cost of an older adult’s medical care. The estate typically has an obligation to repay creditors, including the Medicaid program, before estate beneficiaries inherit assets.
Failing to plan in advance for Medicaid might leave an individual’s most valuable resources at risk. They may receive benefits, but then their loved ones may not be able to inherit anything from their estate.
Technically, Medicaid eligibility depends on not just current circumstances at the time of the application but also major financial moves made in the five years before applying. Prior planning years before Medicaid becomes necessary can help people qualify quickly when they need support. Advance planning can also help people preserve resources for their loved ones after their death.
Reviewing current resources and retirement plans with a skilled legal team can help people address the possible future cost of long-term care. Medicaid planning can give people peace of mind about their own medical support and the financial support of their loved ones in the future.