As a person ages, they should assess their medical care needs and their health insurance coverage as it applies to those needs. Medicare is the federal health insurance program for people 65 and older. Medicare Part A and Part B benefits are available to everyone over the age of 65 and must be taken at such time to avoid a penalty. However, many people do not understand that their Medicare Part A and Part B coverage is very specific in its coverage and has many limitations. These limitations can often leave older adults who require long term care in a difficult financial position. Medicaid is a federal and state regulated program that allows qualifying individuals to receive financial assistance for their long term care needs. By working with an elder law attorney and planning ahead by utilizing estate plan tools, a person can help their family to avoid a time of crisis in finding the financial means to pay for their long term care.
Medicare limitations and coverage
Medicare Part A will pay for inpatient hospital stays, medically necessary inpatient rehabilitation services for a specified period of time, hospice care and some in home health care. Medicare Part B will cover certain doctors’ services, outpatient care, medical supplies and preventative services. Medicare will not cover skilled nursing expenses related to becoming a resident for long term care in a nursing home that may exceed your approved rehabilitation services. Medicare Part A will cover specific physician ordered in home therapy, but will not cover skilled nursing services in your home.
Medicaid programs must follow federal guidelines, but coverage and costs may differ from state to state. Medicaid is an income-based program for those with low or no income and limited personal assets. Medicaid will pay for inpatient and outpatient hospital services not covered by Medicare, physician co-pays, transportation to medical care, nursing facility services, and home health services. Medicaid eligibility requirements differ from state to state, as well, and can be difficult to fully understand all of the rules, regulations, reporting, and exemptions.
Medicaid is a needs based program which requires each applicant to meet eligibility requirements regarding care needs, income, and assets. Most applicants meet the care needs requirement by admittance to a nursing facility for long term care, admittance to an assisted living facility, or by needing in-home services to assist with at least two activities of daily living. Gross income for the applicant must be below a specific monthly amount. However, in Indiana the legislature has provided an avenue to allow those in the aged and disabled category to qualify with a gross income above the special income limit. Medicaid also limits the amount of countable assets an applicant is allowed. Currently, in Indiana an applicant may only have $2,000 in countable assets. For a married couple, the value of the countable assets will vary and is calculated based on certain criteria. Countable assets for a single individual may include specific assets in the sole name of the applicant such as bank accounts, retirement accounts, real property, etc. However, there are exempt assets that allow the applicant or the spouse of an applicant to keep certain assets outside of the $2,000 limit.
How do I plan ahead for Medicaid?
An elder law attorney can assist you in planning ahead for your long term care needs by carefully reviewing your current estate plan, your assets and financial needs, and looking at your health situation. The attorney can make recommendations that will allow you to provide for your care and fulfill your legacy wishes as laid out in your estate plan by protecting assets and allowing you to qualify for benefits when and if you were to need them. This can be accomplished through preparing specific documents such as an irrevocable trust, deeds, retitling specific assets, purchasing exempt assets, or putting together a very specific gifting plan. Making strategic gifts to either a trust or an individual to protect assets or leave an early inheritance to their loved one requires a detailed plan taking into consideration Medicaid rules.
Careful Medicaid planning can be a way for you to protect yourself and the legacy you hope to leave for your loved ones, as well as providing a plan for your loved ones to cover the financial requirements of your long term care without crisis.