As your parents age, health issues can become costly and difficult to sustain. Adult children of aging parents are often saddled with a double financial and emotional burden: that of raising their own children while facing the complex and challenging issues of helping their parents to age gracefully and plan for their estate after death.
Medicaid planning is one piece of an overall estate planning and end-of-life asset distribution strategy. It is important for you to understand how Medicaid planning works and how you can help your elderly parent access this healthcare assistance.
Medicaid planning: What is it?
Medicaid is not the same thing as Medicare. Although both are federal programs, Medicare is an insurance program while Medicaid is an assistance program. Medicare is mainly for people over age 65 of all income levels, but Medicaid is an assistance program for all ages that serves people with low income. That being the case, you may wonder how your parents can qualify for Medicaid assistance, especially if they are above a low-income level. This is where Medicaid planning comes in. With Medicaid planning, your parent can strategically navigate his or her way to accessing benefits. This does not mean “gaming the system” or accessing benefits in an illegitimate way. Rather, it means understanding how the assistance program works so that your parent can apply for benefits within his or her state’s individual guidelines.
Part of overall estate planning
Healthcare is inevitably one of the primary concerns of the elderly. Just as you may be helping your parents plan for their asset distribution by drafting a will or opening a trust, Medicaid planning is something to start thinking about. Since the system relies on an income level to determine eligibility, Medicaid planning can be part of a planned impoverishment strategy. In its simplest explanation, this is a strategy for deliberately reducing assets in later years in order to access government assistance programs, provide for heirs and maximize quality of life without squandering resources.
Medicaid planning can be an essential piece of the overall asset management puzzle for your elderly parent, but it is not a straightforward or simple process. It can be valuable to get assistance from a qualified attorney who works in estate planning and Medicaid planning. A lawyer can help you and your parent navigate a complicated system and put your parent’s best interests in the forefront.