If you need long-term care and cannot afford to pay for either the actual care you need or any form of insurance or annuity protection, then you will need to apply for coverage under the Medicaid program. This program is designed to provide managed care to people who are disabled, age 65 or up and have income and assets that fall below certain federal and state thresholds.

It is often very difficult to get accepted into this program, but taking the following steps can improve your odds dramatically as long as you pay attention to the details. (For related reading, see: Medicaid vs. Medicare.)

  • Find out what the limits are for your state. Although Medicaid is federally funded, it is administered at the state level, and each state has its own set of rules and regulations pertaining to this program. The income and asset levels that are allowed differ from one state to another, so be sure to find out where your balance sheet falls in relation to the threshold. If you are married, then your joint assets will be examined here; you generally cannot have more than $3,000 worth of cash or other assets outside of your personal residence, vehicle and other necessary items. If you are single, then the threshold drops to $2,000. Your single or joint income also cannot usually exceed 133% of the federal poverty level, although several states have thresholds above this amount. You will also have to medically prove that you are disabled in most cases, although certain exceptions apply (such as women with breast or cervical cancer or anyone who is diagnosed with tuberculosis). You must also be either a U.S. citizen or have a green card and prove your residency within the state. (Another list of exceptions for those outside these parameters apply, such those who were victims of human trafficking or are classified as “medically needy,” according to Medicaid statutes.)

  • Start the spend-down process. If your assets or income exceed the thresholds for your state, then you will need to remove those items from your estate. You can gift these things to your children or another reliable party who you can count on to use them on your behalf. You may be able to create a spend-down trust in some cases, depending upon the laws in your state. But be aware that this arrangement is non-enforceable at your end and that you may lose them permanently if the party that you gift to gets into financial trouble. (Top 5 Strategies to Pay for Elder Care.)

  • Start the application process. There are at least three places where you can begin filling out the application process. You can go to www.medicaid.gov, www.healthcare.gov or the website for your state’s Medicaid agency.

  • Get some expert help. There are two other people that you should enlist if you want to qualify for Medicaid. The first person to talk to is a qualified elder care attorney who thoroughly understands the Medicaid laws in your state. The other person is your financial advisor, who can assist you with creating a Medicaid trust or other gifting actions that you need to take.

The Bottom Line

Qualifying for Medicaid is not an easy process. Get all of the help that you can from your financial advisor and a qualified elder care attorney before you begin this process in order to maximize your chances of acceptance. Also be prepared to drastically reduce the size of your acceptable estate through a gifting or donation program so that you meet the federal and state thresholds for your area. For more information on what you need to do in order to qualify for Medicaid, visit the Medicaid website at www.medicaid.gov. (For related reading, see: 6 Best Tips for Caring for Aging Parents.)

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