Even if you have gone your entire life without the need for Medicaid, there is a strong chance that you will need government assistance at some time during your “Golden Years.” This reality is largely due to the high cost of long-term care. Something most of us will need in our later years.
Medicaid eligibility depends, in part, on income and assets. Consequently, you may have heard your share of horror stories. Couples have been known to deplete their entire life savings in order for one spouse to qualify for Medicaid. This leaves the at-home spouse destitute of resources. These stories may lead you to wonder, “How can I protect my spouse when I apply for Medicaid?” First, let’s explore what exactly Medicaid is/does.
What is Medicaid?
Medicaid is a largely federally funded but state administered healthcare program. It is intended for low income individuals and families as well as the disabled and aged. Though you may not need Medicaid during your working years, many find that Medicaid is the only option available when faced with the cost of long-term care. With Nursing Home costs averaging $75,000 annually, many cannot afford to pay for long-term care out of pocket. Moreover, few health insurance plans cover long-term care. Nor does Medicare. As a result, roughly half of all seniors turn to Medicaid for assistance. Yet, the majority of the public remains unaware of what it takes to become eligible for Medicaid.
Who is eligible to apply for Medicaid?
Although Medicaid will cover long-term care costs, you must first be found eligible for Medicaid coverage. Because Medicaid is intended to serve low income recipients, both your income and the value of your assets must be below the program limits to qualify. A fair warning, those limits are low. Your countable resources, as a couple, cannot exceed $3,000 in most states. If they do exceed the program limits, you may have to “spend-down” your resources before Medicaid will kick in and help. However, what becomes of you or your spouse when one of you goes into long-term care and the other is left with little to no resources?
How to protect your spouse when you apply for Medicaid
You can protect you, or your spouse, by including Medicaid planning in your estate plan. A well thought out Medicaid plan can potentially protect your assets and still ensure qualification for Medicaid. Keep in mind that, under Texas law, and most other states, Medicaid uses a five year “look-back” period. So, it is best to start incorporating Medicaid planning into your estate plans as soon as possible.
If Medicaid planning is not currently part of your estate plan and you need to qualify for Medicaid in a hurry, don’t give up hope. You may still be able to protect some of your assets for you and your spouse. The key is to consult with an experienced Texas estate planning attorney, familiar with the Medicaid rules, as soon as possible. Contact the Mendel Law Firm, L.P. by calling 281-759-3213 to schedule your free initial consultation today.
Stephen A. Mendel, Estate Planning Attorney
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