Most older adults automatically qualify for Medicare benefits based on their employment history. Even those who don’t work but can receive Medicare if their spouses had qualifying employment. Retired adults can rely on Medicare to cover basic care needs after they cease working full-time.
However, Medicare has its limits. There are many scenarios in which Medicare may not pay for people’s health care costs. People who spend more than a month in a rehabilitation facility, those who move into nursing homes and adults who require in-home nursing support may need Medicaid benefits instead.
Qualifying for Medicaid can be difficult. The program looks at both countable assets and income to determine if people are eligible. Applicants usually need to plan ahead of time to improve their chances of qualifying quickly. When should people begin planning for Medicaid if they may require benefits in the future to cover their expenses?
Earlier is always better when planning for Medicaid
Technically, people can engage in last-minute Medicaid planning and potentially qualify for benefits. However, they may face a penalty. Their loved ones may also lose out on their inheritance rights because of Medicaid estate recovery efforts.
The best time to plan for Medicaid is before people need benefits, possibly before they begin their retirement. Many people review their estate plans before leaving their jobs. That is an ideal time to address Medicaid eligibility.
Technically, those applying for Medicaid benefits are subject to a five-year lookback period. Any major transfers conducted in the five years leading up to an individual’s application could result in the state imposing a penalty. They may have to pay for their own care for months before Medicaid offers them any support.
People may also need to consider Medicaid planning when they begin noticing changes in their health or cognition. In some cases, family members may need to talk to their aging loved ones about the possibility of nursing home care and the need to cover those expenses later. Those conversations could inspire an older adult to plan for Medicaid before it’s too late.
Addressing Medicaid eligibility can be a valuable part of the overall estate planning process. Older adults who require intensive support may not be able to pay for the care that they need out of pocket and may need to plan carefully to qualify for Medicaid.