Established in 1965, Medicaid remains a primary means to help states provide medical coverage for senior citizens, low-income families, and other individuals who meet eligibility requirements. Examples of certain eligibility groups include, for example, elderly person who meet certain income and asset levels. The eligibility requirements are set to expand in 2014 to include a greater percentage of the population.
The primary requirements for older Americans to qualify for Medicaid include being age 65 or older, being an U.S. citizen (or meeting certain immigration rules), having a Social Security number, and being a resident of the state where the application is filed. There are other groups that can qualify for coverage, but as a senior citizen, these are the basic general requirements. Once you satisfy the general requirements, there are financial requirements to consider.
The specific financial requirements of Medicaid vary across states, but you must have limited income and assets. Your income is determined by considering multiple possible sources including benefit payments such as Social Security retirement or disability payments, pensions, salaries, interests on bank accounts, and dividends from stocks and bonds. In addition to considering your income level, states also consider your assets when determining eligibility for Medicaid. During the application process, you provide documentation of your assets. Assets typically counted when considering eligibility include checking and savings accounts; stocks and bonds; real property other than a primary residence; and additional motor vehicles if there is more than one. Assets ignored for eligibility concerns include the following: primary residence; personal property and household belongings; one motor vehicle; and assets held in certain trusts.
While determining income eligibility is straightforward, asset eligibility is more complex. It is important to remember that, outside of your primary residence, real property, such as a vacation home, is counted as an asset in the eligibility determination process. Additionally, the full value of an asset that you own jointly with someone else can count as belonging entirely to you when the state determines your eligibility. For example, a jointly owned checking or savings account may be your asset since either you or the other owner has full access to the funds.
As mentioned above, your primary place of residence is exempt from the asset assessment process, but the value of home does affect whether Medicaid pays for your long-term care services, including nursing home care. Medicaid does not pay for long-term care if your equity interest in the home exceeds a certain level. The equity interest is your percentage of the equity value of the property. For example, if you own a home by yourself your percentage is 100% of the equity value. The equity value is the fair market value minus any debts secured by the home, such as a mortgage or a home equity loan. The Medicaid limits vary from state-to-state when used to determine if your long-term care services are covered.
Planning for your health care, especially as you grow older, is a complex process. As this brief overview suggests, Medicaid is a powerful service designed to help senior citizens, but it is important to understand how eligibility works and what levels of coverage are available. As with all medical and personal finance planning, it is important to start early, perform the proper due diligence, and have plans in place well before you need to make important and difficult choices.
Steve Sullivan has worked in the financial sector for over 16 years and continues to write articles and blogs pertaining to finances. For more information on senior medicaid visit http://seniorsfinancialsolutions.com.
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