You may not realize it at the moment, but there is a very good chance that you will turn to Medicaid for help at some point during your retirement years. Why would you suddenly need Medicaid if you have never before relied on Medicaid? The answer can be found in the likelihood that you will need long-term care at some point before you die. The longer you live, the greater the odds that long-term care will be needed. That, in turn, leads to the need to qualify for Medicaid benefits to help cover the high cost of that care. If you have never needed Medicaid before, the odds are good that you know very little about the program. Because you may one day rely on Medicaid, it only makes sense to learn more about the program though. With that in mind, consider the following five things you need to know about St. Louis Medicaid:
- You stand a 50-50 chance of needing St. Louis Medicaid at the time you retire – and those odds will increase as you age. About half of all seniors eventually need to qualify for Medicaid. Like many seniors, you might have gone through your entire working years without ever needing to qualify for Medicaid benefits, only to realize that Medicaid is your only option for helping with the high cost of long-term care (LTC) as a senior. When you enter your retirement years you stand about a 50-50 chance of eventually needing LTC. At age 85, those odds increase to a 75 percent chance. If you do need LTC, you will most likely find that your health insurance policy will not cover LTC. Medicare won’t help either as it only covers LTC under very narrow circumstances, and then only for a maximum of 100 days. Because Medicaid will cover LTC, it may be your only option.
- You must have income below the program limits to qualify. Because Medicaid is intended to provide healthcare coverage to low income individuals and families, your income must fall below the program limit to qualify for full benefits. The income limit is subject to change as it is tied to the Federal Poverty Level. Income limits are different for each category of Medicaid as well.
- You must also meet the asset test. For most seniors, the income test is not the problem. The bigger issue is the asset limit, which is set at $2,000 for an individual and $3,000 for a couple. While certain assets are exempt, many seniors still have accumulated enough of a nest egg to have “countable resources” that exceed the limit. When that is the case, you will need to essentially rely on those resources to cover your long-term care costs until the value of those resources falls below the program limit.
- Giving away assets at the last minute won’t work because of the five-year “look-back” rule. Transferring your assets in anticipation of the need to qualify for Missouri Medicaid will not work because of Medicaid’s five-year “look-back” rule. The look-back rule allows Medicaid to review your finances for any asset transfers within the five-year period prior to your application. If any transfers were made for less than fair market value, the value of the asset(s) transferred will be added back into your estate for purposes of determining eligibility. You will then need to “spend-down” that asset if you want to qualify for benefits.
- Your spouse will be protected if you need Medicaid using the spousal impoverishment rules. You may be worried about how the income and asset rules will impact a spouse that remains in the home, referred to as a “community spouse.” Fortunately, the St. Louis Medicaid “Spousal Impoverishment” rules prevent a community spouse from being left without any income or resources. The rules allow the community spouse to keep a percentage of the assets as well as a portion of the LTC spouse’s income if the community spouse has very little income of his/her own.
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding Missouri Medicaid, contact the experienced St. Louis Medicaid planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.