Consider this situation; you move home to share the house along with your widowed father whom at the time of the move is active and healthy. He decides to transfer title to the house to you as well as your wife instantly because it will be yours at his death anyway. Eighteen months later, he is hurt in a freak golf accident, is in a coma, and requires nursing home care. You have depleted his assets; will his exchange of the house to you affect his eligibility for Medicaid?
If the house was transferred for less than market value, you may find that your father is ineligible for Medicaid for a specified number of months because of the transfer, even though Medicaid eligibility was not a concern at the time the transfer was made.
Medicaid is a state-run program that provides hospital and medical coverage for people with low income and little or no resources. Each state has its own rules about who is eligible and what is covered under Medicaid. It is funded by the state and the federal government.
If you are part of the baby boomer generation that is just beginning to retire or providing care for an aging parent or someone else with a long-term illness Medicaid can quickly become an issue. In most circumstances, employers require retired employees to switch to Medicare as soon as they become eligible for it and the employer becomes the secondary insurer.
Medicare won't cover long-term nursing home treatment. An accident as well as illness that requires nursing home care can quickly deplete assets, particularly if you do not have long-term care insurance. Medicaid has specific rules regarding a person's resources and how transfer of resources of can affect eligibility for Medicaid. You are also required to deplete assets before you can become eligible for Medicaid. You should consider the requirement with regard to Medicaid when considering any long term planning.
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