Retired adults who have worked for years are usually eligible for Medicare. Most people expect their state-provided retirement health insurance to adequately address their medical expenses during their golden years.
Unfortunately, Medicare is insufficient for numerous significant expenses, including long-term care costs. When older adults require support that Medicare does not cover, they need to apply for Medicaid benefits. The needs-based coverage available through Medicaid may be the only option if they cannot pay for their long-term care needs out of pocket with their own resources.
Ideally, older adults establish a Medicaid plan long before they ever need benefits. Why should older adults plan in advance if they may require Medicaid later?
Timely access to benefits
An older adult’s support needs can change abruptly, but they may have a lengthy wait for Medicaid coverage. Few things are more frustrating or frightening than needing medical care and having no way to pay for it.
That can be what happens in cases where people fail to plan for Medicaid eligibility in advance. The Medicaid program only provides benefits to those who are eligible based on their current finances and the last five years of major financial transactions. Any large transfers before applying can result in a penalty.
The penalty imposed by the state can leave people without coverage for months. Older adults may end up scrambling to find resources that can pay for their care when they are subject to a lookback penalty due to last-minute transfers before they apply.
Asset preservation
Older adults have to report their countable assets and income when they apply for Medicaid. Even if they qualify for benefits, any resources they still retain could be vulnerable after they die.
The Medicaid estate recovery program can make claims for repayment during probate proceedings. Those demands might force family members to empty financial accounts or even sell the primary residence of the older adult who received Medicaid benefits.
Planning before Medicaid benefits become necessary can help to ensure that older individuals can access coverage without delay or a lookback penalty. They can also preserve some of their resources for their loved ones after their passing. The support of an elder law attorney can be critical for those who may need Medicaid coverage for long-term care costs during their golden years accordingly.