Estate: Don't Rely On Medicaid For Long-Term Care
30875
Finance > Insurance
May 12, 2007
voudrie12
Estate: Don't Rely On Medicaid For Long-Term Care
Millions of retirees expect to rely on Medicaid to cover the cost of their long-term care needs. If you or your parents have that expectation then you must read this article. You shouldn't rely on this program and by doing so you may end up becoming dependent on family and friends for care. Medicaid is a government program designed to provide medical care for those who are impoverished. The costs for this program are exploding. Federal Medicaid expenditures now account for the fifth largest budget item behind Social Security, defense, debt service and Medicare. Based on its current rate of growth, Medicaid expenditures will soon be greater then those spent on Medicare. The majority of the cost is due to the growing number of Medicaid recipients. Currently, 1 in 4 nursing home residents are covered by Medicaid. That number has been growing almost 12% per year. Aging baby boomers will only increase this rate of growth further. There isn't money in Federal or State budgets to cover this expected growth. In an effort to reign in costs, Congress is working on a bill that will make it harder to qualify for Medicaid. Here are a few of the bill's provisions: 1) Medicaid coverage of nursing home care will be prohibited for those with home equity of $500,000 or more. 2) The 'look back' period for the transfer of assets will be extended to 5 years. 3) Certain annuities previously set up to shield assets from Medicaid would now have to name Medicaid as the beneficiary, with the remainder going to Medicaid after death. 4) States are given more leeway in reducing what they pay and limiting benefits for certain enrollees. The purpose of this legislation is to keep people from 'gaming' the system. Medicaid is designed for the impoverished. It isn't designed for those who want the government to pay their nursing home costs while they pass on significant assets to their loved ones. In the past, you could reduce your assets by gifting them to your loved ones. As long as you didn't apply for Medicaid within three years of that gift, it would not be counted as an asset. Now, you'll have to wait five years. You'll no longer be able to buy an annuity, hoping that only the income will be counted, thus 'shielding' that asset. The government is eliminating this loophole. If you live in a part of the country that has seen exponential real estate growth, such as Southern California, look out. Seniors in such places, even if they have few other assets, may be forced to sell their homes and spend that money before qualifying for Medicaid. 'Medicaid planning', the taking of steps to move and shield assets so that they aren't counted by Medicaid, won't be as effective as it was in the past. And qualifying for Medicaid is no cake walk. In general, a person can only have $2,000 in what are referred to as resource assets in order to qualify. A resource is any asset that can be used to produce income. If both husband and wife attempt to qualify, the amount is $3,000. The coverage for in-home care is very restricted in Medicaid. Plus, it will only provide limited funds specifically for care. That means it will continue to be your responsibility to pay the mortgage, taxes, insurance, utility and food bills. This is designed to shift care to those in nursing homes where it is cheaper. If you need skilled nursing care at home, custodial care is also provided. But if you need custodial care alone, its coverage is very restricted. If you want to remain in your home, independent, as long as possible, then don't expect to rely on Medicaid. For those needing care at a nursing home, Medicaid doesn't cover the entire bill. Any income you receive is first applied to the bill. This includes your Social Security, pension, annuity and other income. Medicaid then pays for the remainder. The bottom line is that you and your parents should not rely on Medicaid to meet your long-term care needs. Nor should you rely on your ability to transfer assets to your loved ones and still qualify.
Nationally-syndicated financial columnist and Certified Financial Planner Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He will answer your financial question FREE at http://www.guardingyourwealth.net/
send email to voudrie12
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
Q. Jeff, I've been approached by someone touting the benefits of equity indexed annuity with "Company-X". They say my money will be safe, there's a minimum return and a cap with a participation rate of 100%.
Category:
If you've talked to a broker or agent about rolling over your retirement account, there's a good chance the advisor recommended you invest in a Variable Annuity. Don't do it! I believe the only reason a variable annuity is recommended for an IRA is so the
Category:
Providing for adequate health care is one of the top concerns for today's seniors. And yet, many find themselves coming up short when that need is for long term care. With costs skyrocketing and government purse strings tightening, planning for such care
Category:
Millions of retirees expect to rely on Medicaid to cover the cost of their long-term care needs. If you or your parents have that expectation then you must read this article. You shouldn't rely on this program and by doing so you may end up becoming depen
Category:
Equity-Linked Certificates of Deposit are a safer, low-cost alternative for those who must have an Equity-Indexed Annuity type of investment. These little-known investments allow you to participate in the growth of the market index while your principal is
Category:
Variable Annuities now offer a Guaranteed Minimum Withdrawal Benefit which allows you to earn 5% or 6% even if the market drops significantly. Undoubtedly, you will be pitched a variable annuity or pressured to transfer your existing one into a new contra
Category:
You may be paying too much for health, life or long-term care insurance! I know because a life insurance company recently tried to charge me double. My experience may save you money and keep you from being turned down the next time you apply for insurance
Category:
Do you like being taken advantage of? I sure don't. In fact, I hate it! Worse, it seems like it is happening more and more. Now, more than ever, it is buyer-beware. Read on for some specific examples and to learn how you can protect yourself.
Category:
One of the biggest mistakes I frequently see investors make is needlessly losing control of their money. Any time you pay a hefty commission or face surrender penalties in order to get YOUR money you lose control.
Category:
Perhaps the only area outside the financial world where performance is so closely measured is the Olympics. Competition is fierce, and with events measured to the hundredths of a second, athletes go to great lengths to gain even the slightest edge. The Ol
Category:
Q. Jeff, I want to ask your opinion regarding Health Savings Accounts. On April 1st, the company I work for is changing our current Blue Cross health insurance to Guardian Insurance set up as a HRA. I am single and currently have a $500 deductible. Under
Category:
Are you a gambler? Do you like to play the odds? Here are some real-life odds for you to consider: 90% of people become incompetent before they die!
Category:
If you're getting ready to retire with a large IRA rollover, or your current IRA account is nearing the end of any surrender penalties, chances are you'll be pitched this product. So this week I'm going to reveal more secrets about the truth behind the va
Category:
Getting a new mortgage? Watch Out! Mortgage brokers (even at banks) get paid on commission. As interest rates rise, they must become more creative to make a living. Many are honest, but there's plenty that won't blink an eye at taking advantage of uninfor
Category:
Don't cancel your life insurance policy without reading this first! Depending on your situation, you may be losing tens of thousands of dollars if you do. If you have a life insurance policy that you no longer can afford or need, consider selling the poli
Category:
Don't you just love government red tape? This time the bureaucratic process has given us a real doozy--it's called the Health Insurance Portability and Accountability Act or HIPAA for short. And the unintended affects of HIPPA could have a dramatic effect
Category:
In our culture, the main goal of retirement is to put our working days behind us and devote ourselves to the pursuit of pleasure. Many find, though, that continuing to work in some form keeps them active and gives their lives purpose. Changing your concep
Category:
Living Trusts have become very popular and are being heavily promoted to seniors. Should you Trust or not Trust? That is the question. Read on to learn some simple guidelines that will help you know whether a Living Trust may be right for you and how to g
Category:
Every investor would like to increase their income without compromising their stability. Maybe that's why Equity Indexed Annuities (EIAs) have become so popular, because of their promise of providing a stable income stream.
Category:
While you're making your New Years' resolutions, don't forget to give your financial house an annual tune-up. As the old saying goes, an ounce of prevention is worth a pound of cure, and few adjustments now could save you thousands of dollars, not to ment
Category:
Other links at Finance > Insurance
Do you have home insurance? Do you know why it's important. Learn more about home insurance.
Category:
It is difficult to get auto insurance quotes from all the insurance companies and brokers by phone or mail, but you can do it online. Some web sites will compare all the quotes from a very large number of insurers for you. Find out how.
Category:
My mother-in-law recently passed away after a long and courageous battle with cancer. Throughout her battle, our family had to deal with many emotional and legal issues. Over the next couple weeks, I'll be discussing these in more detail in the hope that
Category:
The first thing anyone purchasing homeowners insurance must understand is why they are buying it. The primary purpose is to protect their most valuable investment, their home, in the event of some form of damage or destruction from uncontrollable circumst
Category:
Site Sponsor
Directory Statistics
Articles: 68228
Categories: 501
Yahoo Entertainment
