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Medicaid and Medicare Planning

| Oct 21, 2020 | Elder Law, Estate Planning

Medicaid is a needs-based program that was created when Medicare was created. It is run by CMS (Centers for Medicare and Medicaid). It was originally meant to provide medical care to single mothers and their newborn babies. It has since grown significantly and has become an insurance plan for the less fortunate financially dependent individuals within our community. The costs of Medical Assistance are shared by both the federal government and the state governments. Medicare is primarily run today by the federal government; however, Medicaid is administered and eligibility is determined by Medicaid, a state-run program.

So you may ask, why do you need a lawyer? The answer is simple. If you qualify for Medicaid and/or Medicare, don’t rest too easily. If you come into any money, both services generally find a way to get reimbursed, whether during your life or after you pass. Pennsylvania has collected over 500 million dollars in Medicaid Payback to date. They do so by placing what is known as “Medicaid Leans” against the estate. Luckily, not all Medicaid payments are reimbursable. Only Medical assistance received by individuals after the age of 55 are recoverable, only when the Medical Assistance payments were for specific types of services. Specifically, Pennsylvania’s estate recovery program only seeks reimbursement for certain services: 1) nursing facility services, 2) home and community-based services such as those provided through the Aging Waiver Program, and 3) related hospital and prescription drug services. In other words, the pay-back is for Pennsylvania Medicaid long-term care benefits. Even life insurance, which is not generally subject to Pennsylvania Inheritance tax, is not even immune to the Medicaid liens.

Assets generally not subject to estate recovery include property owned jointly by the decedent and another, including property owned as tenants by the entireties, life insurance proceeds paid directly to a designated named beneficiary, asset placed in trust before the death of the decedent, irrevocable funeral reserves, certain property of Native American Indians, government repatriations to special populations, and certain trusts for disabled persons, including special needs trusts.

Speaking with an Attorney at Rick Stock law is the first step at not just taking care of Medicaid liens of family members, but having proper planning as to why the sheets should not be reviewed or the windows should not be replaced.