CFP

Incapacity Planning - Medicaid Planning

Medicaid Planning
Medicaid planning is an important part of any estate planning process. There are four basic Medicaid eligibility requirements. A person applying must satisfy all four requirements in order to achieve eligibility.

 

1) Categorical Requirements – To achieve Medicaid eligibility, a person must:

  • Be at least 65 years of age, blind or disabled and be a U.S. citizen.
  • Be pregnant or have children under age six whose family income is at or below 133% of the Federal poverty level.
  • Be a child between ages six to 19 with family members up to 100% of the Federal poverty level.
  • Be an adult who takes care of children under age 18.
  • Receive supplement Social Security income.
2) Medical Necessity – To achieve eligibility for the Medicaid nursing home program, the applicant must have a medical need for licensed nursing care, and must meet the risk assessment criteria for nursing home placement. In many cases, the opinion of the applicant's doctor that the applicant needs to be in a nursing home or assisted living facility will be enough.

3)
Income Eligibility – Under Medicaid rules, the applicant may not receive direct income of more than $1,911 per month (as of Jan. 1, 2008). If the applicant's monthly income exceeds the cap amount, then a Miller trust can usually solve the problem. Income eligibility is often a major stumbling block for Medicaid applicants.

4)
Asset Eligibility – If one spouse is entering a nursing home, the asset cap for the institutionalized spouse is $2,000. If both spouses are entering a nursing home, the asset cap is $3,000. These asset caps are subject to many exceptions. Generally, a home valued at up to $500,000 does not count as an asset for an individual, nor does the spouses' home at any value if one spouse continues to live in the home.



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