If you are close to or past the age of retirement, you have probably spent a significant portion of your working life accumulating assets that could support you during your retirement years. From a financial nest egg to the equity in your home, you will likely rely on your savings to care for yourself as you age.
Unfortunately, longer life expectancies carry with them an often unanticipated negative consequence. Specifically, more adults may need intensive services as they age than in previous generations. From skilled nursing support that allows you to stay at home in your later years to residential care in a nursing home facility, your medical needs could quickly exceed the financial savings you have in place to protect yourself.
Many seniors expect to rely on government insurance programs, such as Medicare, for their medical needs as they age. However, Medicare doesn't cover everything.
Skilled nursing or residential care require Medicaid, not Medicare
If you need a nurse to come out to your house to administer dialysis in your living room or if you need to move into a nursing facility where you receive care around the clock, Medicare will not cover those expenses. It is likely that even if you carry a private insurance policy, that will not cover those expenses either.
Some people do have long-term care insurance, but if you haven't carried the policy throughout your working life, the premiums to sign up later in life are often prohibitively expensive. If you need coverage for skilled care or residential care, you will require Medicaid. To qualify for Medicaid, you will need to meet strict financial requirements.
Planning can increase your chance of securing Medicaid benefits
Medicaid planning is something many adults do at the same time that they update their last will and create a living will to guide their family members as they age. Medicaid planning involves carefully restructuring your household finances to limit your assets. The intention is to meet the criteria to qualify for Medicaid.
You cannot make a bunch of transfers shortly before you send in your application. The federal government will look back at any major financial transactions in the last five years and penalize you for them. The sooner you transfer assets either directly to your family members or into a special trust, the less likely you are to have to worry about that penalty.
As a retired or soon-to-be-retired professional, you paid taxes throughout your entire working life that have helped fund both Medicare and Medicaid. You shouldn't have to worry about becoming indigent before you receive the coverage you require in your later years. Medicaid planning now can give you peace of mind about your security in the future and even leave a legacy behind for the people you love.