Many people get Medicaid confused with Medicare, but there are many distinctions between the two programs. Medicaid, simply put, is a medical assistance program that’s designed for disabled persons and low income, older people. It can also cover younger people who are receiving welfare from the government. Medicare, on the other hand, offers identical benefits to anyone enrolled regardless of their income level.
Medicaid is actually managed by the individual states, so eligibility regulations will vary from area to area. Medicaid also has some benefits that help many people overcome the astronomical costs associated with nursing home care.
Medicaid can come into play when you realize that you’re not going to be able to pay for long-term care. There are some options under the Medicaid plan to help you preserve your assets so that you can also help your loved ones survive financially without you. For instance, there’s something called transfer of assets where a person will transfer property without full consideration. This can be something such as giving away part of a property. These transfers must be disclosed to Medicaid and may cause an eligibility for a period of time.
The use of irrevocable trusts could also be another part of the estate planning process that will help an individual take care of the cost of long-term care. Any kind of trust that can’t be revoked will impact Medicaid eligibility.
Another important option to know about is called Medigap insurance. This is an insurance policy that will cover the gap between what Medicare will pay and the cost of the services. If Medicaid already covers you for the services being rendered, you will not need Medigap insurance. Talking to a qualified estate planning attorney who specializes in Medicaid will help you figure out exactly what kind of protections you need to put in place.