Medicaid is a federal-state program that pays for medical treatment including nursing home care for low-income individuals who are 65 or older, blind, or disabled. The rules on qualifying for Medicaid change often. Saving enough money to pay for nursing home care is a practical impossibility for many older people and this may make reliance on Medicaid necessary. Planning for Medicaid qualification involves difficult decisions that have complex property and tax law implications. Planning opportunities do exist and early planning is essential to maximize the options available.
Recent Changes in Medicaid:
You may have heard that there have been significant changes in Medicaid qualification thanks to the Deficit Reduction Act of 2005. Medical eligibility can offer important, even invaluable, benefits for those in need. The law has changed significantly regarding qualification requirements for Medicaid to pay for the cost of nursing home patients’ care. The Deficit Reduction Act of 2005, commonly referred to as the “DRA” was signed by President Bush on February 8, 2006.Michigan adopted many of the requirements of the DRA on July 1, 2007. Financial eligibility for Medicaid is based on the person’s countable assets and income. The latest modifications contain changes to policies affecting asset transfers (referred to as divestments), divestment penalty (ineligibility) calculations, the divestment look-back period, life estates, promissory notes, undue hardship provisions, asset conversion (from countable to non-countable) and even the homestead exemption. Sound confusing? It is! If you have someone in need of nursing home care and they may be trying to qualify for Medicaid you may want to consult an attorney for assistance.
Here is a quick run down of the changes:
Protections for the community spouse remain in place so not everything has changed. Obviously, it is important to have someone on your side when tackling this ever changing law… Each situation is unique, so call the office so we can review your loved one’s situation.
Check out the following link for a publication from the Probate and Estate Planning Section of the State Bar of Michigan: