Connecticut estate planning attorney Barry Horowitz explains the basics of Medicaid in this legal guide.
What Is Medicaid?Medicaid is a healthcare program for low income individuals and families. Medicaid is primarily funded by the federal government; however, is administered by the individual states. Basic Medicaid typically covers things such as:
• Doctor visits
• Hospital stays
• Emergency care
• Preventative care
What Is the Difference between Medicaid and Medicare?Although both cover healthcare expenses, Medicaid and Medicare are distinct programs. Like Medicaid, Medicare is funded by the U.S. government but is also administered by the federal government. Medicare is an entitlement program, meaning that if you paid into the program during your working years, you are automatically entitled to benefits when you turn 65. Medicaid, on the other hand, is a “needs based” program. As such, an applicant must demonstrate a financial need to qualify.
Why Would I Need to Qualify for Medicaid?As a senior, the likelihood that you will need long-term care (LTC) goes up every year. As of 2019, you can expect to pay almost $14,000 a month, on average, for LTC in Connecticut. Because neither Medicare nor most private health insurance policies will cover LTC expenses, you may need to rely on Medicaid to help with your LTC expenses at some point during your retirement years.
What Are the Connecticut Medicaid Eligibility Requirements?Along with basic requirements, such as citizenship and residency, you must meet income and asset limits. The income limits are tied to the Federal Poverty Level, or FPL which changes each year and is determined by your household size and geographic area. The “countable resources” limit refers to the value of your non-exempt assets. As of 2019, you cannot have countable resources valued at over $1,600 for an individual.
What Is Medicaid Planning?Medicaid planning uses legal tools and strategies to protect your assets and help ensure your eligibility for benefits in the event you need them in the future. For example, you might establish a Medicaid trust, which is an irrevocable living trust into which you would transfer non-exempt assets. Incorporating Medicaid planning into your estate plan early on, it can ensure that you qualify for Medicaid benefits in the future if you need them while also decreasing the likelihood of losing valuable assets as a result of your need for Medicaid.