When people can’t pay for their own medical care, Medicaid is there to protect them. Unlike Medicare, which is automatically available for those over retirement age, Medicaid is a needs-based program. Individuals have to show that their income is low enough to qualify.
Applicants also typically have to show they don’t have enough assets to pay for their care themselves. Certain property won’t prevent you from qualifying when you need help paying for medical care. Owning a home, for example, doesn’t automatically disqualify you from benefits.
Many people think that the only problem solved by Medicaid planning is helping someone qualify when they need benefits later in life, such as to pay for nursing home care. However, Medicaid planning also helps protect your estate from claims by Medicaid, which expects you to pay back every penny worth of medical treatment that you received.
Medicaid will even come after your house
While you are still alive and need medical support, you can count on Medicaid to pay for necessary treatment. The program will not make claims against your house or other assets while you are still alive. However, after you die, the Medicaid estate recovery program, as practiced by the Colorado Department of Health Care Policy and Financing, will make a claim to any assets in your name.
Medicaid will expect repayment from your estate. It can seek reimbursement for every bill it ever paid from any assets remaining in your estate, including the house that you own. While you may have hoped to pass your house on to your children, if you don’t protect it, Medicaid could ultimately lay claim to that home and consume the inheritance you wanted to leave for your children.
You can plan ahead qualify for Medicaid and protect your assets
Realizing that you may one day need Medicaid is an important step. You can review your estate plan and make the necessary financial adjustments now.
Spending down or gifting assets can be one approach that people take. Moving property into a trust or changing ownership of it is another approach. Engaging in Medicaid planning now helps you get the care you need as you age and protect the inheritance you want to leave for the people you love.