One of the greatest fears we have as we grow older is the need, at some point, to go into a nursing home. We face not only a loss of personal freedom, but the potential for significant financial expenses, as well. It is not necessary, however, to use your life savings to pay for it. With careful and individualized planning, whether in advance or as the result of an unexpected circumstance, it may be possible to protect your assets.
Medicare vs. Medicaid
It is important to understand the differences between Medicare and Medicaid, and whether you may qualify for one or both programs.
Medicare is funded by the federal government and governed by the Social Security Administration. Regardless of your income, it serves as medical insurance for people with disabilities or those aged 65 and older who have worked and paid enough into the Social Security to qualify.
Medicaid, on the other hand, provides health coverage to eligible people who lack the money or sufficient health insurance to provide for their medical care. These include those 65 or older who need a nursing facility, and those who are blind or otherwise disabled. Individuals applying for Medicaid are bound by guidelines that include state residency, income limits, and asset limits. Both the federal government and the State of Ohio fund Medicaid, and it is administered by the Ohio Department of Jobs and Family Service of each county.
There are two benefit packages associated with Medicaid. The Basic Health Package include services such as:
- Hospital care
- Doctors’ visits
- Preventative health care
- Prescription drugs
- Dental and vision care
- Mental health and substance abuse treatment services
- Transportation for Medicaid-approved medical appointments
The Long-Term Health Package provides additional services for persons who are aged, blind or have other disabilities, and who can satisfy additional Medicaid requirements. This program is most frequently used by nursing home residents or those in intermediate care facilities. It also provides an option that permits eligible persons to receive care in their homes. People using the Long-Term Health Package also receive coverage offered by the Basic Health Package, regardless of whether they are institutionalized or at home.
You may be eligible to receive coverage through both Medicare and Medicaid. Medicaid may cover expenses not normally paid by Medicare. Individuals who qualify for both can receive assistance with all or part of their Medicare Part B premiums, deductibles and co-payments.
If I own my home, do I have to sell it before my spouse or I can get Medicaid?
No. You do not have to sell your home as long as you, your spouse, equity-sharing sibling, or dependent children reside in the home.
If I have no spouse or dependent children, will I have to sell my house for Medicaid to provide nursing home care?
No, as long as you retain an intent to return to the home, regardless of your prognosis and ability to do so.
If I have too much money to qualify for Medicaid, can I give assets to a child or grandchild so I can qualify?
If you give assets away, there may be some period of time in which Medicaid will not cover your nursing home payments. The period of ineligibility depends on the value of the property gifted, and can run 5 years or more. There are a few exemptions that protect an individual’s ability to gift assets without a penalty, such as to a legally disabled child, and these exemptions should be reviewed with an elder law attorney before any transfers are made.
If my parent has an extended stay in a Medicare-certified facility and is unable to afford it, what can I do?
Following release from a hospital, Medicare will only pay for a certain number of days in an extended care facility. Your parent should consider Medicaid planning right away and not wait until Medicare coverage runs out.
Medicaid Planning is unique to each individual or family situation. If you have additional questions, we have attorneys at Sitterley, Vandervoort & Davis Ltd., skilled in Elder Law, who can answer them. They can also discuss Medicaid planning options in greater detail.