What is Medicaid and how does it work?
Medicaid is a joint state and federal program that provides health coverage to low-income or low-resource individuals. Due to the high monthly cost of skilled nursing care, Medicaid is the leading payer of nursing home care in the United States. Contrary to popular belief, it’s not just for those with minimal resources. You may be able to protect assets with an asset protection plan, and still qualify for Medicaid.
Most people worry about losing their life savings to a nursing home. Medicaid planning uses exemptions that allow you to keep some of your assets. We will focus on how an asset protection plan can minimize what you will have to pay to a nursing home in the event of a serious health event.
In Pennsylvania you are allowed to keep $45 of your income per month plus any amount you use to pay for health insurance; the rest of your income has to be paid toward the cost of your care. Your assets, including real estate, cash, investment accounts, retirement accounts, life insurance with a cash value great then $1,500, vehicles and any business interests are countable resources when applying for Medicaid. Under current Medicaid laws you can exempt the house you live in, one vehicle, and should you be married, your spouse can retain their retirement accounts and anywhere between $29,724 and $148,620 of the joint assets, depending upon the total amount of your combined assets. These exempt assets would not count toward your Medicaid eligibility. Anything over this calculated amount of exemptions could be put into an asset protection trust and protected from nursing home costs. This may still leave assets at risk fo