What Does Medicaid Cover? Planning for Future Expenses

It’s a subject that none of us wants to consider; however, eventually, we all must start making plans for future expenses that we will encounter as we age. One of the biggest expenses is the cost of long-term care, with residency in a nursing home averaging more than $7,000 a month in the U.S. and even more if you wish to have a private room. The sticker shock of nursing home expenses often causes aging individuals and their loved ones to wonder, what does Medicaid cover?

What Does Medicaid Cover for Elderly Beneficiaries?

One in four Medicaid beneficiaries is either elderly or disabled. However, these two groups account for nearly two-thirds of Medicaid spending for acute and long-term services. The types of benefits that seniors can receive through Medicaid include both services that are federally mandated as well as optional Medicaid services that state lawmakers have decided to include.

Mandatory Medicaid Benefits

Regardless of the state you live in, if you have been approved for Medicaid, you can obtain services such as:

• Inpatient and outpatient hospital services
• Early and periodic screening, diagnostic, and treatment services
• Physician services
• Rural Health Clinic services
• Federally Qualified Health Center services
• Nursing facility services
• Home health services
• Transportation to medical care

Optional Medicaid Benefits

Optional Medicaid benefits include benefits that are not federally required but are available through the Medicaid program in states where those services are offered. Some of the optional benefits that may be available in your state include:

• Prescription drug coverage
• Clinic services
• Physical and occupational therapy
• Respiratory care services
• Optometry (vision) and dental services, including eyeglasses and dentures
• Hearing and speech disorder services
• Home health or private duty nursing services
• Hospice
• Mental health services

You Also Can Receive Home- and Community-Based Services

States often provide a wide array of home- and community-based services (HCBS) through Medicaid, including:

• Assistance with personal care tasks, such as showering
• Transportation services for running errands, etc.
• Skilled nursing care
• Assistance managing health and dietary goals
• Home-delivered meals
• Assistance with household chores, such as laundry

Does Medicaid Cover the Full Cost of a Nursing Home?

Medicaid is a hybrid federal-state program that provides health care and other benefits for low-income individuals and families, pregnant women, people with disabilities, and the elderly. The federal Medicaid program permits states to provide Medicaid benefits to individuals over the age of 65, even if they do not have disabilities or minor children. In order to qualify for Medicaid, an individual must be considered low-income in accordance with the income guidelines for the Medicaid program in their state. Some assets are considered when evaluating whether the Medicaid applicant is considered low income, such as the balances of checking and savings accounts, CDs, stocks, and bonds.

When you become eligible for Medicaid, all income you receive must be applied toward nursing home costs, though some states allow you to deduct an allowance for expenses such as private health insurance premiums. There is a five-year “lookback” on all asset transfers you have made, which is simply a way for the program to reduce waste resulting from fraud. However, not all asset transfers will cause a denial of Medicaid benefits. Allowable transfers include those made to:

• Your spouse
• Your child under the age of 21
• Your permanently disabled or blind child, regardless of age
• An adult child who has been living in the home and providing your care for at least two years prior to when you applied for Medicaid
• A sibling who has equity or interest in the home where you reside and has been living there with you for at least a year before your Medicaid application was made

After Death, the State Can Recoup Its Benefits

If you obtained Medicaid and used the coverage to pay for your medical expenses, after your death, the state can attempt to recoup as much of the benefits they paid out for your care as possible. One common way that the state recoups expenses is by placing a lien on your home or other assets. However, in order for them to be able to do this, it must be part of your probate estate. If your home is jointly owned by your spouse or sibling or held in a life estate or trust, the state will not have access to the proceeds.

When Medicaid Is Not the Best Solution

For many individuals, Medicaid is a great solution for obtaining skilled nursing care as it allows an individual to access those services even if they can’t afford to pay over $7,000 a month for it. However, there are times when Medicaid is not the best solution for planning for your future expenses, including:

• If you have a number of high-value assets. These assets not only will likely disqualify you from receiving Medicaid assistance but also can be taken to pay for your long-term care.
• If you planned to leave your home and other assets to loved ones. Because the state will try to recoup the benefits it paid on your behalf after your death, it is important that your assets be transferred in a way that does not bring scrutiny through Medicaid’s “lookback” period.

Questions About What Medicaid Covers?

For more information about whether Medicaid is a good option for affording long-term nursing care, contact an experienced estate planning lawyer for a free case evaluation.