Medicaid can be a complicated and frustrating benefit for seniors 65 years of age and older.
It is funded by both the state and the federal government, with the intention of providing much needed medical benefits for people with a lower income. If a person has assets over the state minimum, however, they will not qualify for Medicaid, in spite of a lower income. In many cases, this will cause a person to “spend down” assets, usually through medical costs. Once these assets are spent down, the candidate can qualify but they must be spent down in very specific ways and years ahead of the potential need.
This can be frustrating for those who have spent their lives accruing savings and other assets for their senior years. If done properly, however, seniors can qualify for Medicaid while protecting important assets. Depending on circumstances, it may be necessary for assets to be transferred up to five years prior to an application for Medicaid.
The government places assets into two broad categories, exempt and non-exempt assets. Non-exempt assets include things like cash, savings, stocks, mutual funds, jewelry, collectibles, cars, and boats. Exempt assets include a personal residence, furniture and appliances, one automobile, and a wedding ring. While neither is a complete list and certain restrictions apply, the concept is that to qualify for Medicaid, a person cannot have assets that exceed a certain level. So, to qualify, a candidate will spend down before making an application for Medicaid.
One of the ways people do this is through certain irrevocable trusts and irrevocable pre-paid funeral plans. The word “irrevocable” is key here because the government wants to be assured these assets are spent or accounted for and can’t be retrieved. They still have value, however, to the Medicaid candidate and their families.
With an irrevocable contract for burial space and related items, an unlimited amount of money can be spent down to cover final expenses for immediate family members. These include your spouse, children, and their spouses, and parents. Qualifying items include:
- Burial Plots
- Cremation Niches
- Grave Opening and Closing Fees
- On-going care of the burial space
A larger irrevocable pre-paid funeral contract can even include other funeral costs like transportation of the body, cremation, costs of the funeral director and staff, embalming, and even clothing and flowers.
There are also revocable pre-paid contracts that have much lower limits for what may be exempt from consideration for Medicaid.
If you live in Northern Kentucky and the Greater Cincinnati, Ohio area and would like to know more about the spend down benefits of pre-paid funerals for you and your family, contact the professionals at Fares J. Radel Funeral Homes and Crematorium or your financial adviser. Planning ahead can provide peace of mind and better protection of your assets.