As people grow older, they should take steps that can help them to live out their days in a comfortable manner. For some people, Medicaid planning is necessary. This is often necessary for people who think that they might need long-term care in the future. Our Texas readers might be interested in learning some basic information about Medicaid planning.
The Medicaid program is a medical assistance program that is used by the elderly, the blind, the disabled or those in the low-income bracket. The exact qualifications for Medicaid coverage vary by state. Those qualifications can include an income limit and an asset limit. While there are certain exemptions to the assets, it is still possible for someone's assets to prohibit them from Medicaid.
Under Medicaid, assets are either countable or exempt. If you have high value countable assets, you likely won't be able to qualify for Medicaid. In some cases, getting rid of the countable assets and getting exempt assets might help you to plan for Medicaid coverage later. Certain trusts and annuities might also help.
Anyone who is trying to plan for Medicaid eligibility in the future should know that there is a 60-month or 5-year look-back period. This means that when you apply for Medicaid, the state can go back as far as 60 months for your finances. In some cases, information garnered from going through those records might prohibit a person from qualifying for Medicaid.
When you realize that Medicaid is the single largest nursing home bill payer in America, it is easy to see why planning for long-term care on Medicaid is necessary. Doing this planning can be complex because of some of the laws pertaining to Medicaid planning. For this reason, understanding the laws and how they affect your situation are vital for anyone trying to plan for his or her future care.
Source: 360 Degrees of Financial Literacy, "Medicaid planning basics" Oct. 05, 2014