Medicaid benefits exist for the protection of vulnerable people. Children, individuals who cannot work and older adults may rely on Medicaid to meet certain medical needs. Retired adults with Medicare sometimes apply for Medicaid benefits to cover long-term care costs.
Medicaid covers what Medicare does not, including skilled in-home nursing support and a room in a nursing home. Only some people qualify for Medicaid coverage. They need to have limited income and limited personal assets. If someone meets the qualifications, they can begin receiving Medicaid benefits for their long-term care needs later in life without any delay or penalty.
Unfortunately, even those who qualify for benefits might be responsible for paying them back with their estate resources after they die. Advance planning is typically the only way to minimize losses generated by estate recovery efforts after a benefit recipient dies.
How Medicaid estate recovery works
The federal government has a rule in place requiring that Medicaid programs in individual states seek to recover benefits paid for long-term care after people eventually die. The Texas Medicaid estate recovery program files a claim in probate court requesting reimbursement for the full value of their long-term care services.
The claim by the state takes priority over the beneficiaries or heirs of an estate. If there aren’t enough assets to repay Medicaid, the beneficiaries of the deceased may receive nothing at all from their estate. People who qualify for benefits may wrongly assume that their assets have adequate protection. What they may not have considered is the home where they reside. A primary residence does not count against an applicant when they seek benefits. However, it can be vulnerable to Medicaid estate recovery efforts after their passing.
Careful planning is necessary if someone wants to preserve the home where their spouse or children may live after they die while simultaneously qualifying for Medicaid if they require long-term care. Cross and deeds changing how someone holds title are among the viable solutions for those hoping to preserve home equity, and their eligibility for Medicaid if they need it.
Learning more about Medicaid planning can help people preparing for their golden years. The right financial plans help people get the support they need and also assist in preserving the legacy of older adults after they die.