Health care costs have risen dramatically over the past decade, often at a rate two or three times that of inflation. After working an entire lifetime, many people are devastated by their health care costs upon retirement. A significant number of people need to live in nursing homes, the cost of which quickly drains an individual?s assets. Medicaid will assist with health care costs for people over 65; but to qualify for Medicaid people often spend their life savings and assets. However, with proper planning, you can ensure that your financial legacy stays intact while qualifying for necessary medical aid.
What is Medicaid?
Medicaid is a health insurance program funded and managed by both state and federal governments. Medicaid offers medical treatment, including nursing home care, for low-income individuals who are 65 or older, blind or disabled. Payment is made directly to the health care provider.
Medicaid Eligibility
To qualify for Medicaid certain requirements must be met. These may include your age, income and other assets (anything that can be sold for cash) and whether you are a U.S. citizen or a lawfully admitted immigrant. The rules for counting your income and resources vary from state to state and from group to group. There are special rules for those who live in nursing homes. Because Medicaid eligibility is based on need, a person is not eligible to receive benefits if they have income or assets that exceed the limits established by each state or county. If someone?s assets are more than the state allows, he or she will have to liquidate their assets to pay for care before they will receive aid from the program. Assets include checking/savings accounts, mutual funds, stocks and bonds, deferred annuities, the cash value of most life insurance policies, revocable living trusts, retirement funds, and burial trusts beyond a minimum amount. It is important to consider ways to ensure that you can protect your assets and still receive assistance from Medicaid. States can look back to find asset transfers between 36 and 60 months prior to the date an individual applied for Medicaid. These transfers may restrict the amount of insurance benefits you receive. It is important to contact an elder law attorney before you attempt to qualify for Medicaid coverage.
Prepay Your Funeral
One of the ways you can protect your assets from being considered a liability against Medicaid approval is to prepay your funeral. This must be done properly in order to be legally binding. First, you must purchase an insurance policy specifically for your final expenses. With the help of your insurance agent, you then irrevocably assign this policy to a trust or funeral home. Up to a legally determined amount, most Medicaid agencies exclude these funds when determining eligibility. This process ensures that you have the money you need for the remembrance that you want. It will also relieve your family of the burden of funeral expenses during their time of loss. Finally, it is a lawful way to reduce your assets and make sure you are eligible for the health care assistance you need.
Dale M. Krause is a National Medicaid Crisis Planning Specialist with Krause Financial Services, Inc. Mr. Krause?s educational credentials include a B.S. degree from the University of Wisconsin-Stevens Point, Wisconsin; a J.D. degree from Thomas Cooley Law School, of Lansing, Michigan; and, an LL.M. in Taxation from DePaul College of Law, of Chicago, Illinois.
Mr. Krause is also a member of the Wisconsin and Michigan Bars, National Academy of Elder Law Attorneys, Inc., Coalition of Wisconsin Aging Groups, Institute of Elder Planning Studies, International Association For Financial Planning, The Financial Planning Association, Society of Financial Service Professionals, Fidelity Advisor Council, and is a licensed insurance agent and stockbroker. Mr. Krause is a regular speaker at continuing legal education forums throughout the United States. Dale M. Krause, J.D., LL.M. KRAUSE FINANCIAL SERVICES 1120 Red Wing Trail, De Pere, WI 54115 Telephone: (866) 605-7437 Fax: (866) 605-7438 E-mail: dalekrause@insurance-endowment.com Website: http://www.insurance-endowment.com
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