Medicaid is a government program that provides health coverage to low-income and disabled individuals. Even though they have similar names, Medicaid and Medicare are distinct from one another. For example, all people age 65 and older are eligible for Medicare, while only those with low-income and a limited number of assets may qualify for Medicaid. Funding for Medicare comes 100% from the federal government. However, each state develops its own Medicaid program following federal guidelines and splits their program’s costs with contributions from the federal government. As a result of this setup, the rules governing Medicaid differ from state to state.
According to a 2015 Star Tribune Article, Minnesota has surpassed one million Medicaid enrollees. This means that one in every five Minnesotans is now covered by public health care. In Minnesota, Medicaid is a jointly run federal-state program called Medical Assistance (MA). This large number may be attributable to the fact that Medicare DOES NOT cover long-term care facilities like nursing homes, which forces elderly individuals covered previously by Medicare to shift to Medicaid for coverage. Understanding how to qualify for Medicaid/MA and the role that estate planning plays in doing so is becoming more and more important.
The typical process for an individual to qualify for Medicaid involves two parts: medical and financial. On the medical side, a county employee who works for the applicant’s home-state Medicaid program evaluates the potential beneficiary’s medical situation. If the potential beneficiary meets the state’s standards for the minimum level of medical care needed, or if the potential beneficiary is already in a nursing home (a typical qualifier in most states), then the county employee signs off on the medical portion of the Medicaid checklist.
The financial side of qualifying for Medicaid can be a bit trickier. In most states, single recipients of Medicaid may have no more than $2,000 in assets to their name (In Minnesota the asset limit is $3,000). However, if there is a married spouse still living outside the nursing home or not receiving care funded by Medicaid, he or she is subject to an asset cap, as well. This cap is why it is crucial to discuss your situation with an Elder Law Attorney. Gifting your assets or transferring these assets to a trust in most cases disqualifies you from some or all of your potential Medicaid funding in Minnesota, even if your total assets are below the maximum value allowed in your state. There is also a five year look back period in the Medical Assistance application process.
An Elder Law Attorney who is versed in your state’s laws will know how to help you carefully begin to re-situate assets for a Medicaid application that will best preserve these assets for your future use.