Understanding The Differences Between Medicaid And Medicare

In this article, you can discover:

●     Differences between Medicaid and Medicare for different groups.

●     Assets considered for Medicaid eligibility and exemption limits.

●     Strategies for asset protection while qualifying for Medicaid.

How Does Medicaid Differ From Medicare?

Medicaid and Medicare are distinct government-run programs that cater to different groups. Medicare, a federal program, offers health coverage for individuals aged 65 and above, or those under 65 with disabilities, regardless of their income. On the other hand, Medicaid, a joint state and federal program, provides health coverage for individuals with very low incomes. In elder law planning, long-term care Medicaid is often involved, requiring the applicant to be a Michigan resident over the age of 65 and meet the medical criteria for long-term care Medicaid.

What Assets Are Typically Considered When Determining Medicaid Eligibility?

Medicaid eligibility based on assets considers both countable and uncountable (exempt) assets, taking into account the applicant’s marital status. For a single individual, the asset limit in 2023 is $2,000 in countable assets. If a married applicant applies with only one spouse, the asset limit remains $2,000 for the applicant and $148,620 for the non-applicant spouse. However, if both spouses are applying or receiving Medicaid benefits, the asset limit is $3,000.

Can A Person Receive Medicaid If They Own A Home?

When applying for Medicaid, real property, including the primary residence or additional houses, is treated differently. The primary residence may be considered a non-countable and exempt asset if it meets specific equity limits. However, additional properties owned by the applicant, unless meeting certain exemptions (e.g., having a disabled individual residing there), are likely to be considered countable assets and will factor into Medicaid eligibility.

How Can Someone Protect Their Assets While Still Qualifying For Medicaid?

Asset protection and obtaining Medicaid eligibility involve various strategies and considerations. Exempt and allowed areas of spending can be explored, and in certain circumstances, a Medicaid asset protection trust may be utilized. Protecting assets should involve thorough estate planning and legal documents tailored to the client’s goals while maximizing asset protection and meeting Medicaid spend down requirements.

What Is The Look Back Period For Medicaid Eligibility?

In Michigan, long-term care Medicaid has a five-year look back period, which means that any assets transferred by the applicant or their spouse within five years of applying for Medicaid benefits may be subject to a divestment penalty if the transfer was for less than fair market value.

How Does The Medicaid Look Back Period Work?

Transferring assets for less than fair market value within five years can negatively impact the Medicaid applicant’s eligibility. Any such transfers or gifts are subject to a divestment penalty, potentially delaying Medicaid eligibility or even disqualifying the applicant altogether.

Can Gifts Or Transfers Of Assets Affect Medicaid Eligibility?

Medicaid spend down involves reducing an applicant’s assets to meet Medicaid guidelines. It requires evaluating income, countable assets, exempt assets, and non-countable assets to develop a plan and strategy that safeguards the client’s protected assets while qualifying for Medicaid benefits as soon as possible.

Are There Any Exceptions To The Medicaid Asset Transfer Rule?

Certain exceptions exist to the Medicaid asset transfer rules. Among them, the ones least frequently utilized are transfers to a spouse or a disabled child.

Can Medicaid Planning Be Done After A Person Enters A Nursing Home?

Medicaid planning can still be done after a person enters a nursing home. The Medicaid application must be submitted within the month that the individual entered the nursing home facility. For example, if the individual entered on June 3rd, 2023, they would have until the end of June to submit an application for Medicaid coverage for the entire month of June.

For more information on Medicaid And Medicare Programs In Michigan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (248) 800-2548 today.