Most working professionals and their spouses are eligible for Medicare benefits when they retire. They may assume that they don’t need to worry about qualifying for Medicaid due to their work history or overall health.
However, people never truly know what may happen after they retire. Many older adults who require long-term care services eventually apply for Medicaid to cover those expenses. For those who have not planned in advance, there are risks when applying for Medicaid for long-term care. Understanding those risks can help people find the motivation to plan in advance to enhance their eligibility and protect their assets.
What happens if people need Medicaid but have not made financial adjustments in advance?
Delayed benefit onset
When people apply for Medicaid, the state looks at not just their current finances but also the last five years of financial records for the household. Large gifts and transfers during that time can trigger a penalty. The applicant may need to pay for their own care for a set number of months before Medicaid begins covering their expenses, which can leave them in a very difficult position.
Estate recovery efforts
The second concern for Medicaid applicants is how the state may seek reimbursement for any long-term care benefits. Estate recovery efforts can force the liquidation of valuable assets, including the primary residence of the Medicaid recipient. The Medicaid estate recovery process can leave surviving family members with very little financial support after someone dies.
Proper planning before applying for Medicaid takes much of the risk out of the process. An attorney familiar with Medicaid benefits and applications can help older adults make financial moves early so they feel more confident about applying if they ever need long-term care.