Medicaid is important for many senior citizens, because Medicare will not pay for long-term care. Nursing homes and assisted living communities are extremely expensive, and costs are rising year-by-year.
Doing nothing as you hope for the best is an exercise in defying the odds. Approximately 70 percent of people who are turning 65 will need long-term care eventually according to the U.S. Department of Health and Human Services. It is likely that you will need long-term care at some point in time, so you really must plan for this contingency in advance.
Medicaid Can Provide a Solution
The answer for many people is Medicaid. This is a government health insurance program that will cover long-term care, but you must be able to demonstrate financial need if you want to qualify. Because of this, many people spend down or divest themselves of assets in advance of applying for Medicaid coverage.
In most states, the asset maximum for individuals is just $2000. That’s the bad news. The good news is that some of your possessions don’t count when Medicaid is evaluating the extent of your assets.
Non-countable assets would include your wedding ring, your engagement ring, and any heirloom jewelry that you may own. One vehicle does not count when Medicaid is determining your eligibility, and your household goods and personal effects are not considered to be countable assets.
Your Place of Residence
Your home, up to a certain equity limit, is not considered to be countable when you are applying for Medicaid. In 2014, the equity limit in the state of Iowa is $543,000. If you are married and your spouse is remaining in the home, there is no upper equity limit at all.
It should be noted that there is Medicaid recovery to consider when you are digesting the above information. When you are first applying for Medicaid, the value of your home will not count as long as it does not exceed the upper equity limit.
However, under federal guidelines, each state is required to seek recovery from the estate of a decedent who was using Medicaid to pay for long-term care. If your home was still in your personal possession at the time of your death, it could be subject to Medicaid recovery efforts.
Free Report on Medicaid Planning
In this blog post we have answered a frequently asked question, and we have provided some additional basic information about Medicaid. If you would like to obtain some in-depth information about Medicaid planning, we have a resource that you will find to be quite valuable.
Our firm has prepared a special report that closely examines Medicaid planning for people who are concerned about long-term care costs. This report is being offered on a complimentary basis. To obtain access to the download, click this link and follow the simple instructions: Free Medicaid Planning Report.