Medicaid was established in 1965 as a public health insurance program for those who could not afford medical treatment. Medicaid is the primary source of funding for long-term nursing home care for many seniors.

"Until they are qualified for Medicaid, most people have to pay for long-term care out of their own money. Medicaid originated as a welfare program, even though Medicare is an entitlement program. When it comes to eligibility, you must meet the program's definition of "impoverished," says a Rhode Island-based elder law expert.

Nursing Home Care: Medicare vs. Medicaid

Medicare partially reimburses nursing home care. After a three-day stay in the hospital, Medicare will pay for the first 20 days of treatment at a skilled nursing facility. Unless they have additional insurance, patients will have to pay $185.50 per day in 2021 if they don'tdon't have Medicare coverage for the following 100 days. 1 On days 101 and up, the patient is responsible for all charges.

Obtaining Medicaid Eligibility

Every state has Medicaid programs for low-income individuals and families, pregnant women with impairments, and the elderly. With the Affordable Care Act (ACA) in place, states can now give Medicaid to people without minor children or a handicap who are under the age of 65.

Based on the Federal Poverty Level, income guidelines are commonly used. Guidelines and qualifying requirements vary by state. For example, a person's monthly income in New York State will be capped at $1,482 in 2021, while in Mississippi, it will be $1,047 and $1,394, respectively.

How Your Assets Affect Your Chances of Being Eligible

In addition to your income, your assets will be considered when determining your eligibility. Assets that can be counted include money in a bank account, certificates of deposit (CDs), stocks, and other types of securities.

If you're single, you can keep $2,000; if you're married, you can keep $3,000 in assets that aren't considered countable. In certain states, these sums may be more or lower, depending on where you reside.

Personal property, such as your house, car, possessions, and funds set aside to cover funeral costs, are not included in your net worth. They are also excluded if you can establish that additional assets cannot be accessed.

Rules for Asset Transfer and Eligibility

In the past, some families would transfer patient assets into the names of other relatives, such as the children, to avoid exceeding Medicaid'sMedicaid's income restrictions. The Deficit Reduction Act of 2005 makes it considerably more difficult to carry out these operations." There is a five-year "lookback" period when applying for Medicaid for any asset transfers.

Medicaid divides the transferred amount by the state's average nursing home care cost to arrive at the penalty. Let'sLet's say Medicaid finds that the average monthly cost of a nursing facility in your state is $6,000, and you've transferred $120,000 in assets. To qualify for Medicaid, you must pay the nursing home's costs for 20 months.

When a State Can Recoup Its Costs

A state can reclaim Medicaid funds after the death of a Medicaid participant. The primary claimable asset is generally the house. A lien on it (or any other asset) is only possible if it is part of a deceased person's estate. The asset may be protected against recovery if held in trust or in joint ownership with a spouse. Even if both spouses have died, the government can usually put a lien on the house if no dependent kid is living there.

Medicaid: What Is It?

For low-income individuals and families and persons with disabilities, Medicaid is a federal program managed at the state level. Medicaid is not part of Medicare, a government program that pays for some medical expenditures for those 65 and older.

Is Medicaid Covered for Long-Term Nursing?

It ‘it’s possible to get Medicaid to cover long-term care costs at a nursing home. You must fulfill the state's eligibility requirements to qualify for Medicaid financial assistance. Medicare doesn't cover long-term care expenditures, so it's vital to know that.

The Verdict

You should consider relying on Medicaid for your long-term care insurance if you have a substantial inheritance. And even if you don'tdon't, it may not be able to satisfy all of your requirements. It best to consult with an elder or senior care attorney as soon as possible if you think you'll need to qualify so that they can arrange up your affairs in such a manner that your assets no longer count against you if you ever need to.

To avoid Medicaid'sMedicaid's lookback period, you must have made asset transfers at least five years before you apply for the benefit. Even so, it would be best if you aimed to have enough funds to cover the cost of a facility or long-term care insurance privately for the first six to twelve months.