Ask the Experts by Dan Tripp
Q: I’ve been looking at getting long-term care insurance but I’m wary of the cost; won’t Medicaid take care of me if I don’t have insurance?
A: Yes, you can receive care under Medicaid, but remember that Medicaid is basically welfare coverage and is based on financial eligibility. In other words, you must have limited income and assets.
Your income will most likely consist of Social Security payments, VA benefits, if any, pensions, any salaries or wages, interest from bank accounts and CDs and any dividends from investments. Assets that are counted are checking and savings accounts, stocks and bonds, CDs, any real property aside from your primary residence, and any motor vehicles if you have more than one. You can exclude your home, personal and household belongings, life insurance if the face value is under $1,500, up to $1,500 in burial expenses, and assets held in certain trusts (see your attorney for the details).
The bottom line? You must be virtually destitute. Thinking about gifting away your assets to family, friends and/or charity? Medicaid has a 5 –year look-back window. Any assets that were under your control at any point in the past five years are included as assets in determining your eligibility. Medicaid adds up all your assets and uses that figure as the amount you need to pay prior to Medicaid picking up the tab. Finally, keep in mind that Medicaid is a “first bed available” system. Not every facility accepts Medicaid patients, and many that do have only a small percentage of beds set aside. What this could mean is that the first bed available is some distance from home, making it more a problem for family to oversee your care.
An ethical long-term care insurance agent can work with you to find the best solution. Be sure to ask about whether the policies offered participate in Michigan’s Partnership Program, which will help you shelter assets from being counted while you’re alive and from the state recovery program after death.
Dan H. Tripp is a local agent with over 27 years’ experience helping individuals, families and small businesses navigate the complexities of life, disability and long-term care insurance. He holds a CLU designation from The American College and is a member in good standing with NAIFA and the Society of Financial Service Professionals. He is currently with the Janet Coates State Farm Agency, 63 Kercheval, 313-332-0676. Tripp is a member of The Family Center’s Association of Professionals.