At this point in your life you may be fortunate enough to have employer sponsored health insurance coverage for you and your family. As such, you may have never given much thought to qualifying for Medicaid benefits. When you create your comprehensive estate plan, however, you need to do more than just think about qualifying for Medicaid as a senior. You need to include Medicaid planning in your estate plan now to be certain you will qualify when you reach your “Golden Years.” Having never needed to rely on Medicaid benefits, you may know very little about the program or about the eligibility requirements. To help get you started with your Medicaid planning component, the Vero Beach Medicaid planning attorneys at Kulas & Crawford have put together some tips.
Medicaid Basics
You probably have some idea how the Medicaid program operates and what benefits it offers; however, if you have never participated in the program you may not know as much as you should. For example, people often get Medicaid and Medicare confused, or refer to them interchangeably. Both Medicaid and Medicare are federally funded health care programs; however, the similarities top there. Medicare is an entitlement program, meaning if you reach the age of 65, and have paid into the system over the course of your working career, you will automatically be enrolled, regardless of your income and/or assets. Medicaid, on the other hand, is a “needs based” program, meaning you must demonstrate a need for benefits to be eligible to participate.
Why Do I Need to Include Medicaid Planning in My Estate Plan?
One of the biggest, and most important, differences between Medicaid and Medicare is that Medicare will not cover long-term care (LTC) expenses except in very limited circumstances. Even if your circumstances qualify, Medicare will only cover LTC for a very short period of time. For most seniors, this can be a huge problem given the high cost of LTC. Across the country, the average cost of a year in LTC in 2016 was about $80,000. If you are a resident of the State of Florida, you can expect to pay more than the national average for LTC. In Florida, the average yearly cost of LTC in 2016 was almost $100,000. Given that the average length of stay in LTC is 2.5 years, a Florida resident could expect a LTC bill of a quarter of a million dollars ($250,000)! Neither your basic health insurance coverage (if you have any) nor Medicare will likely cover your LTC expenses. Fortunately, Medicaid does cover LTC; however, you must qualify for benefits first.
Vero Beach Medicaid Planning – Tips to Ensure You Are Covered
Unless you can afford to pay for LTC out of pocket, you will need to qualify for Medicaid if you end up in LTC at some point in your life. To ensure that you qualify when the time comes, you need to start planning now. The following tips may help:
- It is never too early to start planning. Medicaid uses a 5-year look-back period. Assets transferred for less than fair market value within the five-year period prior to your application will be discounted and the value of the assets imputed back into your estate. To ensure that any assets transfers occur outside the 5-year period, start planning early.
- Make sure you know which assets are exempt. Some assets are not considered part of your “countable resources.” As such, their value does not count when determining your eligibility. Sometimes, simply converting a non-exempt asset to an exempt asset can make all the difference in your eligibility.
- Review your plan when you retire. Your income will likely change when you retire as may your asset picture. Make sure you review your Medicaid plan around the time you retire to make sure that it will still ensure that you qualify if you need help with LTC costs down the road.
Contact Us
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding Vero Beach Medicaid planning, contact the experienced Vero Beach estate planning attorneys at Kulas & Crawford by calling (772) 778-8481 to schedule an appointment.
