Medicaid: What you do not know can hurt you
Consider this scenario; you move home to share the house with your widowed father who at
the time of the move is active and healthy. He decides to transfer title to the house to you and
your wife immediately because it will be yours at his death anyway. Eighteen months later, he
is hurt in a freak golf accident, is in a coma, and requires nursing home care. You have depleted
his assets; will his transfer of the house to you affect his eligibility for Medicaid?
If the house was transferred for less than market value, you may find that your father is
ineligible for Medicaid for a specified number of months because of the transfer, even though
Medicaid eligibility was not a concern at the time the transfer was made.
Medicaid is a state-run program that provides hospital and medical coverage for people with
low income and little or no resources. Each state has its own rules about who is eligible and
what is covered under Medicaid. It is funded by the state and the federal government.
If you are part of the baby boomer generation that is just beginning to retire or providing care
for an aging parent or someone else with a long-term illness Medicaid can quickly become an
issue. In most circumstances, employers require retired employees to switch to Medicare as
soon as they become eligible for it and the employer becomes the secondary insurer.
Medicare does not cover long-term nursing home care. An accident or illness that requires
nursing home care can quickly deplete assets, especially if you do not have long-term care
insurance. Medicaid has specific rules regarding a person’s resources and how transfer of
resources of can affect eligibility for Medicaid. You are also required to deplete assets before
you can become eligible for Medicaid. You should consider the need for Medicaid when
considering any long term planning.
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