Planning for Seniors: Medicare, Medicaid and MassHealth

Most people will require long-term care at some point in our lives. Long-term care may be provided in a nursing home, an assisting living facility, or in the comfort of one’s own home.  It includes services required to assist elderly individuals with everyday tasks such as eating, dressing, bathing, and toileting.  In the absence of proper planning for long-term care, it is easy for families to deplete their life savings and assets to pay for nursing home care.  To understand what your family can do to plan for long-term care, often referred to as Medicaid Planning, one first needs to know the distinctions between Medicare, Medicaid and MassHealth.

Understand the Differences Between Medicare, Medicaid & MassHealth

Medicare is the federal health insurance provided to seniors over age 65. Medicaid, however, is a joint program provided by State and Federal Governments that assists individuals with paying for health services and nursing home costs. MassHealth is simply the name used for Medicaid in Massachusetts. As a 100% need-based program, in order to qualify for Medicaid/MassHealth, Massachusetts residents need to meet specific asset and income-level guidelines. In addition, Medicaid/MassHealth will pay for some home health care services through various programs and, in some situations, part of the cost of assisted living facilities.

If an individual is currently receiving Medicare benefits, it does not mean that he/she will automatically qualify for Medicaid/MassHealth. When you or a loved one need long-term care in a nursing facility, the difference between Medicare and Medicaid becomes very important. For example:

Your 75-year-old mother suffers a stroke. Medicare will pay for your mother’s care in a hospital or nursing facility for a maximum of approximately 4 months. If care is necessary for a longer duration, then she is expected to pay out-of-pocket for the care, which can cost as much as $10,000/month. However, if your mother qualified for Medicaid in Massachusetts her costs for long-term care would be covered by the program.

Medicaid Planning

Because Medicaid/MassHealth is a need-based program, many people utilize some form of Medicaid planning with the goal of qualifying for coverage. So how does Medicaid planning work?

Simply put, Medicaid planning is the method or process of organizing your assets and income in a way that makes them inaccessible to you. If your assets and income are inaccessible, the state does not count them when determining whether you are eligible for Medicaid benefits.

The benefits of Medicaid planning include: sheltering your countable assets, preserving assets to pass on to your loved ones, and providing for your spouse.

Although it sounds foolproof, Medicaid planning can be tricky as all states have a look-back period in terms of asset transfers. In Massachusetts, the current look-back period is five years; therefore, any assets transferred during the past five years can be counted when determining whether an individual qualifies for Medicaid coverage. Poor planning can lead to a person not being able to access his or her assets, and/or being disqualified from Medicaid coverage.

The Socius Law Firm helps families plan for the potential of long-term care so that you do not exhaust your life-long savings and assets on nursing home care, and instead, provide a legacy for your family and loved ones. Contact us today at 508-870-5759 to learn more about Medicaid Trusts in Massachusetts and how the Socius Law Firm can help your family for long-term care.

By Todd Rosenfield

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