Clearing the Air: Common Medicaid Misunderstandings

With 2020 now receding from view and an end to the Covid-19 pandemic (hopefully) in sight, that sigh of relief so many of us need is finally on the horizon. The New Year brings promise of better times and yet it would be foolish to forget the lessons of the last twelve months. Chief among these is that health cannot be taken for granted and having a plan to ensure access to care is essential. For millions nation-wide, this means organizing assets in order to qualify for Medicaid. After all, despite common misconception, Medicaid is the best way for many folks to gain the long-term care coverage they need. 

Five Frequent Medicaid Myths 

1. Only Low-Income Adults Qualify
   This is both the most common and most deeply-flawed misunderstanding on this list. First, nearly half (49.7%) of the 76 million Americans receiving Medicaid are children (which is part of why planning is essential for people of any age) and second, many millions of middle-income individuals may qualify with proper foresight.

2. Gaining Coverage Means Hiding Your Assets
   Not only is this notion mistaken, it is unethical. An experienced (and honest) attorney can walk you through such common practices as spousal income and asset transfers, annuities, Medicaid asset protection trusts, and qualified income trusts (to name just a few legal instruments). All of these both work to preserve your assets and are reported directly to Medicaid through the application process.

3. Medicaid Means You (or Your Parents) Will Lose Their Home
   This misconception is related to the above but because of its prevalence (and frightening nature) it deserves individual mention. Contrary to popular belief, Medicaid rules, in fact, aim to preserve the family home. What’s more, a well-organized plan can prevent the home from being lost in what is referred to as estate recovery when the person receiving benefits dies. While too much to get into here, an experienced attorney can walk you through all of the details.

4. Medicaid Only Covers Nursing Homes
   It is true that traditionally Medicaid has mostly paid for nursing home care costs and yet (because nobody wants to be in a nursing home) some states, including Texas, offer home and community-based services (HCBS) programs. These programs allow beneficiaries to receive care in their own home or community rather than in an isolated setting and strive to make lifestyle decisions in consultation with each individual’s unique needs.

5. It Is Too Late to Gain Coverage
   Regardless of your age, financial well-being, or medical history, it is never too late (or too early!) to initiate long-term care planning. While it is true that Medicaid employs a five-year look-back period when assessing an applicant’s financial eligibility, you may still gain access and retain significant assets with proper planning even if you need care now. 

According to government data, a person turning 65 today has an almost 70% chance of needing some type of long-term care in their remaining years. Such care comes at an overwhelming cost and yet this need not be a burden if you have a plan in place. The simple act of getting started on building such a plan provides immense relief and if there’s one thing most people in the US need right now, it’s just that: relief. 

Download our FREE Medicaid Planning in Alabama: What You Need To Know Guide to help you get the ball rolling toward a worry-free 2021! Contact us today to set up a consultation or if you have any questions.