Health care costs are never far from the minds of many people in Milwaukee, and long term care is no exception. Despite your efforts to put aside money in a savings account or some other investment, your total savings still might not be enough to pay for prolonged care costs. Worse yet, you might have too much money to qualify for Medicaid.
To prevent becoming trapped in this financial limbo, Marketwatch explains that people turn to Medicaid planning as a solution. Medicaid planning is a way to make sure that in the event of a health crisis that requires long term care, you will be eligible to receive Medicaid. Here are some important facts about getting started with Medicaid planning.
Defining Medicaid Planning
Even if you are on a low income, you can still be rejected for Medicaid if you possess too many assets that you can use to contribute to your health care, like a retirement account or a checking account. Medicaid planning is the act of transferring assets before you actually need Medicaid for the purposes of lowering your income and assets below the threshold that could disqualify you for Medicaid. This can be accomplished by many different methods, such as creating a trust or converting nonexempt assets into exempt assets.
Exempt and Nonexempt Assets
To qualify for Medicaid, you can expect your assets to be assessed by whether they are exempt or nonexempt. Your assets are considered exempt if you cannot use them for your health care costs. Conversely, assets that you can access or cash in to pay medical bills are counted as nonexempt. These assets can consist of your savings and checking accounts, stocks, mutual funds, or real estate that you own, although your primary place of residence will not be counted.
Timing Is Crucial
If you are considering Medicaid planning, it is best to do it sooner rather than later because of “look back” stipulations. If you finish your asset transfers a week, a month, or even five years before you apply for Medicaid, you will not be considered eligible. Your asset qualification for Medicaid should have lasted for a pre-determined period of time for you to be accepted.
Most states have a five year period for qualification, and while some states do lower the look back period to three years, Wisconsin is not one of them. The Wisconsin Department of Health Services website explains that effective January 1, 2014, Wisconsin has a five-year look-back period for Medicaid applicants. So any resident of the Badger State who may need Medicaid in the future should give serious thought to asking a Medicaid planning attorney for assistance.