If historic trends continue, it’s estimated that about 43% of baby boomers will need some type of nursing home or extended living care at some point after they reach the age of 65. Daily costs for nursing home care can exceed $300 per day, making paying for such care very difficult for many people. That’s why about 50% of all nursing home residents use Medicaid to pay for long-term care costs. However, not everyone qualifies for Medicaid, and there are many myths surrounding the program and what it requires.
Myth 1: I have to be poor to get Medicaid.
Yes and no. Medicaid allows anyone who meets specific eligibility criteria to use the program to pay for extended care costs. In order to qualify, you need to have no more than $14,250 in assets (in New York State), even though this figure excludes your home, personal automobile, and personal property. With the proper Medicaid plan, you can protect other property as well and still qualify for the program.
Myth 2: I can give away my assets to my children and qualify for Medicaid.
While you can give away your property in order to qualify, you must meet Medicaid eligibility requirements with respect to the timing of such gifts. Generally, any gifts given within the past five years will cause you to be ineligible for Medicaid benefits. Even if the gifts are tax exempt under gift tax guidelines, they are still counted for Medicaid eligibility.