Medicaid is a government welfare program created to be a safety net for the poor, disabled and medically needy. It is a great program to provide for people who cannot provide for themselves.
While it started out for the poorest Americans, Medicaid is also being used as an additional funding source for middle\upper income Americans who need Long Term Care services. But few people are aware that every state has a Medicaid Estate Recovery Program and fewer still understand that this law gives the government the right to recover what they have paid out in long term care benefits.
Consider this true story. Bill was an insurance professional who lived 3 hours away from his widowed mother. His mother was diagnosed with dementia and was cared for in a Medicaid paid for nursing home for 7 years. Upon her passing Bill received a notice from the state that said he had 90 days to pay back the money that was paid for her care or they would auction off the four-generation family farm and take the proceeds from that. Bill couldn’t believe what happened and watched his family farm be sold to pay for his mother’s care.
Adding to Medicaid pressure is the graying baby boomers and Healthcare reform expenses as well as states being more vigilant to “save” as much money as possible.
By planning ahead and buying Long Term Care Insurance you can protect your loved ones from experiencing the same issue as Bill. In addition, many states have a Partnership Program that will allow those who buy certain types of Long Term Care policies to protect even more of their assets from Medicaid Estate Recovery. To find a policy that qualifies for Partnership Protection, work with a long term care specialist who can show you the options.
Medicaid is a great social welfare program that deserves to be protected. We need to care for those who are less fortunate or unable to care for themselves. But the days of Medicaid being an additional funding source for those who can pay for Long Term Care expenses are changing. Talk with your financial planner or our Consumer Specialists to learn more about protecting yourself and your loved ones.