Medicaid (not Medicare) is a federal/state health program for the needy and low-income. The rules are state-by-state and many of us are now looking at Medicaid for our parents that have little to no assets and who need to be in either assisted living or full time nursing care.
The Medicaid rules in all states are very detailed and hard to follow. But, safe to say that there are two eligibility requirements – income and assets. There are assets that are counted by Medicaid and assets that are exempt. For instance, in Michigan, a person can own only $2,000.00 in assets to be eligible for Medicaid, and a person’s primary residence is exempt – not counted – in the total assets. If the assets exceed the minimum, a person must personally pay for the assisted living or nursing care until the assets reach that level.
Income levels are another eligibility requirement. Most, if not all of a person’s income, is paid directly to the assisted or nursing care facility. Again, the requirements go by state.
The cost of assisted living and nursing care facilities also vary by type and by state. The costs can be $4,000.00 per month and up, depending on where you live, the type of facility and the level of nursing care needed by the ailing person. The best thing to do is, when it is getting harder for a family to take care of an ailing person on their own, begin to check out some of the facilities for cleanliness, level of care, cost and waiting time. Some of the better facilities have a waiting list and, if you will need Medicaid, only a certain number of beds may be allocated to Medicaid patients. Don’t wait until the last minute, especially if you can do your research now.
If you are able to qualify for Medicaid, there is another caveat that you must watch out for after death, and that is Medicaid recovery. States are required to seek recovery from a person’s estate for payments made by Medicaid. Some states seek repayment in an aggressive manner, but some states don’t make a big effort in the recovery process. In any case, remember that it is the person’s estate from which Medicaid can seek recovery. So, if there is nothing in the estate – nothing that needs to go to probate court – there is no recovery to seek. One of the main items of recovery is a person’s primary residence. If the spouse is no longer living, or if there is no spouse, and the house isn’t deeded to another person at the time of death of the Medicaid recipient, the house will most likely go to probate court and the state could file a claim to recoup its money. In these instances, it is best to put someone else’s name on the deed. Many states call the deed different names – transfer on death deed, beneficiary deed, ladybird deed, etc. With these types of transfers, upon death, then the house automatically goes to the other person listed on the deed. This avoids the house going into probate, and consequently, avoids a recovery claim by Medicaid.