An important part of planning for the future is considering how to pay for health care costs as one gets older. Long-term care facilities can eat up savings and assets quickly, leaving even well-off couple struggling to keep up with payments.
Medicaid is a program typically meant for lower-income individuals and families. However, setting up a trust may help those 65 years of age and older to qualify.
Eligibility requirements for Medicaid
According to Medicaid.gov, there are certain groups that Medicaid grants mandatory eligibility to for participation. Some examples of these groups include individuals who receive Supplemental Security Income, families meeting low-income eligibility and qualified children and pregnant women.
For most individuals, Medicaid determines eligibility based on gross adjusted income. However, for certain groups, other things help determine eligibility. These factors include disability, blindness, foster care or enrollment in cancer programs or SSI.
In addition to income, there are other criteria applicants must meet. These include state residency, citizenship or permanent residency, pregnancy status and age.
How a Medicaid trust helps with eligibility
According to Next Avenue, setting up a trust may be one strategy to reduce the income counted to establish Medicaid eligibility. The trust owner can transfer non-exempt assets to the trust, which is then controlled by an assigned trustee. This not only improves the chances of Medicaid eligibility, but it also helps preserve the assets.
Another option is to set up a Miller or Qualified Income Trust. This allows for excess income to go into the trust.
Because there are numerous rules and requirements related to Medicaid and setting up a trust, it is important that people consult with an attorney so planning can begin early and is done correctly.