Q: What is the difference between MediCARE and MediCAID, and doesn’t MediCARE cover a nursing home stay?
A: MEDICARE is your government health insurance. It covers medical expenses such as hospital and doctor charges. It has a limited benefit for a nursing home stay, but only if you were hospitalized for at least three days prior, require skilled nursing care, and are continuing to benefit medically (usually undergoing rehab of some type). Under those circumstances, you may be entitled to benefits (100 days, at the most, but usually much shorter).
Under any other circumstances, you’re on your own. MEDICARE does not pay for long-term care. MEDICAID, on the other hand, is the Federally funded, state-administered program designed to provide long-term care (nursing home and, depending on the particular state, other types of facilities or care), but only after the patient meets certain financial conditions.
Q: What types of long-term care does Medicaid cover?
A: Medicaid, depending on the particular state, covers the full range of long-term care, including nursing home, adult foster care, assisted living, as well as at-home care. Remember, Medicare is your Government health insurance, and, except for a limited benefit for skilled nursing care, does not cover long-term care. Medicaid, on the other hand, is the program that can provide benefits for long-term care.
Q: Do I have to be broke to get Medicaid?
A: Technically, yes! As a single person, you can only qualify for Medicaid benefits once your countable assets are below $2,000.00 (in Michigan). It is possible to achieve this status with the assistance of attorneys whose practice includes proactive and reactive Medicaid planning. With appropriate guidance it is generally possible to protect 50-60% of an individual applicant’s estate in addition to their home, car, funeral plan and burial space. Additional assets may be protected if it is possible to do planning for an applicant’s disabled child.
Q: Will I have to sign over my home to Medicaid in order to get help?
A: No, you will not be required to sign over your home (or any other asset) to Medicaid in order to qualify. However, Michigan has implemented Estate Recovery and it is essential that certain steps be taken to keep an applicant’s home outside of the reach of Estate Recovery.
Q: I am married, can’t I just put all of my assets in my spouse’s name and then apply?
A: No! There are asset limit rules even for married couples and even though it may be possible to protect 100% of a married couple’s assets and qualify the other for benefits, special steps must be taken in order to transfer assets through the appropriate vehicle. Typically, a special trust is drafted for this purpose.
Q: Will transfer (or gifting) of assets result in denial of Medicaid benefits?
A: The transfer of assets between spouses is not a problem. However, if you transfer or sell an asset to someone other than your spouse, you must get fair market value in return for it, or you risk Medicaid disqualification. Medicaid has a five-year “look-back” provision. (In many cases there are special exemptions for a blind or disabled son or daughter, as well as a caretaker son or daughter who lived with the parent. And if you know how to take advantage of these exceptions, you may be able to protect up to 100 percent of the assets.) If you sell or transfer an asset for less than fair market value, the difference between the price you received and the actual value would likely be considered an “uncompensated transfer of assets,” resulting in a period of disqualification from Medicaid benefits.
Contrary to what most people think, that disqualification period is not five years. It can actually range from a few days to decades, depending on the value and timing of the transfer and the state in which you are applying for Medicaid. In addition, there are exceptions, which may reduce or eliminate the Medicaid penalty period.
Q: Will putting an offspring’s name on my account (for example, joint savings account) protect it from Medicaid? What about a revocable “Living Trust?”
A: No! The account will still be counted by Medicaid, no matter how long ago it was done. And since the trust is revocable, it provides no protection from Medicaid either.
Q: Won’t the Medicaid caseworkers tell me how I can save my assets?
A: No! The Medicaid caseworker’s primary responsibility is to perform assessments and determine eligibility for the various Medicaid programs. It is not their responsibility to help you save your assets. In addition, they would not normally have the intimate knowledge of the various strategies and financial tools required to save assets. Besides, as government employees they are not allowed to give specific financial or legal advice, nor are they licensed or trained to do so.