That question really says it all. A big question to many families, and one I hear a lot as a Grand Rapids, Mi elder law attorney – what is Medicaid? Medicaid is a big umbrella, generally designed to make sure that essential healthcare services are available to people without the financial resources to get them. It is NOT Medicare, although many people confuse it with Medicare. Medicare is a government program providing certain healthcare coverage to all people over 65 years old (as well as certain younger people with disabilities). For purposes of this post, I will focus on what many refer to as skilled nursing Medicaid. This encompasses three main programs: Medicaid assistance to persons in Medicaid-certified nursing homes, MI Choice Waiver Program (Waiver), and the Program of All Inclusive Care for the Elderly (PACE). The last two provide Medicaid assistance to people who need long-term care services and meet the nursing home level-of-care requirement, but who elect to receive that care in the community (e.g., not in a nursing home).
The main confusion to many is between Medicare and Medicaid. They are different, as you can see from the explanation above. The next misconception out there is that you have to put yourself into poverty to qualify – that you have to spend everything you have until almost nothing is left. It is very true that there are income and asset limits on qualifying for Medicaid. For 2017, the asset limit for a single individual is $2,000 in countable assets, and for a couple is $120,900 in countable assets. The numbers vary on the income side, depending on the program for which you are trying to qualify. The key thing to remember on asset limits is that the number is based on “countable” assets. Not all assets are “countable”. This is a key part of Medicaid planning.
So what is a countable asset? Quite simply, it is an asset that the Department of Health and Human Services (DHHS) will count when adding up the value of your assets. Or, said another way, it is all assets of any kind that are not excluded assets (e.g., non-countable assets). Very generally speaking, the only non-countable assets are: your homestead, household and personal goods, a vehicle, a very small amount of life insurance (this one requires a very detailed review of the policy itself), and certain types of burial and funeral arrangements (not all such arrangements are excluded).
That is just a brief overview of what Medicaid is (and what it is not). You will see all sorts of different approaches and planning philosophies out there when it comes to Medicaid and Medicaid planning. My personal viewpoint is if you can afford to pay for your own care, you should want to. If for no other reason than you tend to have more choices when you do.
Make sure to be watching for Part 2 of my “what is Medicaid” series. It should be posted in the next few weeks.