As people get older, it’s typical to experience increasing health issues. Individuals who don’t have much in savings or retirement income and need medical services beyond what their families can provide may benefit from Medicaid for long-term care.
Often confused with Medicare — which is a Federal program — Medicaid falls under individual states’ governments and picks up when other coverage ceases.
“Medicaid works as the payer of last resort,” says Deitra Lawson, Corporate Billing Director with Chicago Methodist Senior Services. “After you’ve recovered from rehabilitation or a longer necessary medical stay and you need to have even more covered by a different provider, that’s where Medicaid steps in.”
Qualifications and Services Offered with Medicaid for Long-Term Care
Per Lawson, anyone who has assets under $2,000 qualifies for Medicaid. The majority of Medicaid for long-term care funding covers the medical side, such as nursing homes and hospital stays, for coinsurance to Medicare and some small therapy services. Food assistance and community assistance are two additional options.
The Application Process for Medicaid
Unfortunately, applying and receiving Medicaid for long-term care is not an overnight process — even though one’s circumstances can seem to come on suddenly.
“Not everyone expects to be applying for Medicaid. It’s typically a situation where you’re backed into a corner when you need to apply. The thing to remember is to prepare and be proactive before you ever need Medicaid, because when you’re applying, administrators look at finances five years prior to the date of application,” cautions Lawson.
What you’ve done in that five-year time frame may actually disqualify you for Medicaid for long-term care, resulting in a penalty period and making it much more complex once you actually file the Medicaid application. Lawson advises being proactive in estate planning and getting a power of attorney for property. She also suggests pre-paying for burial costs prior to submitting an application.
“You want to get all of that in place, because once a Medicaid application is done, it’s harder to get it in place and not be considered another asset,” she informs. “You want to get your prepaid burials done before applying for Medicaid and ensure it’s an irrevocable account, because if it’s not irrevocable, Medicaid will consider that an asset and then you’re over the $2,000 limit.”
Avoiding Qualification Issues for Medicaid
While transactions that occurred within the five-year period seem perfectly reasonable to the everyday person, Medicaid may consider them to be fraudulent. “Anything that’s over $500, Medicaid is going to be looking at. What happened with that money?” warns Lawson. “So, if you’re giving it to somebody, maybe a family member or friend, Medicaid is going to view it as a fraudulent transfer. It may not necessarily be fraudulent, but in their mind, that money was not used for the resident or for medical expenses. They’re essentially going to interrogate everything that’s $500 or more in the last five years.”
To avoid disqualification, Lawson strongly urges everyone to not put off planning for Medicaid for long-term care. “It’s all about being proactive.”
Listen to an interview with Deitra Lawson, Corporate Billing Director with Chicago Methodist Senior Services, on Living Well with Chicago Methodist Senior Services here.