The Medicaid program is something to think about when you are planning ahead for the eventualities of aging. People who are going to qualify for Medicare may assume that they will never need Medicaid, but this is simply not true for many.
Medicare & Medicaid
Medicare is a government health insurance program that is available to seniors that have paid into the program sufficiently. Medicaid is a need-based health insurance program financed by the government.
Medicare will not pay for long-term care such as a stay in a nursing home or assisted living community. Medicaid will absorb these expenses.
Long-term care is extremely expensive, and most people would not be able to pay comfortably out-of-pocket.
Dementia
A very significant percentage of Americans suffer from dementia when they reach an advanced age. Upwards of 45 percent of individuals who are at least 85 suffer from Alzheimer’s according to the Alzheimer’s Association, and Alzheimer’s causes dementia.
People with dementia oftentimes reside in nursing homes or assisted living communities. As we stated above, Medicare will not pay for this type of custodial care.
Medicaid Planning
If you were to experience dementia symptoms, or recognize early signs of dementia in a loved one, your family could begin to start planning ahead with Medicaid eligibility in mind.
You cannot qualify for Medicaid coverage unless you meet the requirements with regard to your available resources. It is a need-based program, so you have to be able to demonstrate significant financial need.
If you do not take any steps to shape your financial profile to suit the program’s requirements on your own terms, you will not qualify. You will be forced to essentially go broke paying for long-term care out-of-pocket. Once you have virtually nothing left, you can qualify.
Medicaid planning typically involves divesting yourself of personal ownership of resources well in advance of applying for the program. You have to act in advance because there is a five year look back. If you give away assets within five years of applying for Medicaid, you are penalized and your eligibility is delayed.
You don’t have to wait until you see symptoms of dementia. It is possible to craft a comprehensive financial plan that intelligently prepares you for Medicaid eligibility late in your life, even if you have no reason to believe that you will need long-term care at the present time.
However, if you are seeing symptoms, you may want to take action. You can find a list of Alzheimer’s symptoms by visiting the Alzheimer’s Association website.
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Ryan M. Denman and Dennis D. Duffy
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