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Why is Medicaid planning so important for retiring adults?

On Behalf of | Sep 23, 2021 | Firm News

Adults who are old enough to retire will usually qualify for Medicare for their medical needs after their retirement. However, those with worrisome medical conditions may find that they actually require Medi-Cal benefits instead.

Medi-Cal is the California state Medicaid program, and it offers more comprehensive coverage than Medicare. Older adults often discover that they need Medicaid coverage due to the different benefits available. For example, Medicare has specific limitations on rehabilitation coverage or nursing support. Medicaid, on the other hand, will pay for skilled nursing services or even nursing home expenses.

Unfortunately, it is common for older adults to not plan ahead for Medi-Cal until they need benefits. Waiting until you need coverage to think about applying could mean financial hardship for you at that time and for the people you love after you die.

When you apply, the state looks back at your financial records

There are limitations regarding both your assets and your income if you hope to qualify for Medi-Cal benefits. Almost anything other than your home can count against you for qualifying. Some people will make transfers right before applying in the hope that they can qualify even though they have well-funded retirement accounts or other valuable assets.

The state will review your financial history to prevent people from openly abusing the medical system. Thirty months of transactions and transfers are subject to scrutiny when you apply. Any questionable transactions during that time will potentially trigger a penalty that requires you to pay for your own care even if you no longer have enough assets to do so.

Medi-Cal can also destroy your legacy

Qualifying for benefits isn’t the only reason to plan ahead if you think you might need Medicaid. There is also the risk that the recovery program for Medi-Cal will make a claim against your estate.

Not only could the state claim your personal property and bank accounts to recoup the medical coverage you receive, but they might even make a claim against your house. Estate claims could completely consume whatever assets you wanted to leave for your loved ones when you die.

Planning ahead to qualify for Medicaid helps you get benefits when you need them and ensures your family members won’t have to pay for your care later.