If you aren’t familiar with Medicaid, it is a health care assistance program, run by both the state and federal government, that pays for medical services deemed medically necessary by a physician. Medicaid is considered a “need-based” program because there are limitations on the amount of financial resources a recipient is allowed to have in order to qualify for benefits. For example, to be eligible for Medicaid, an individual can only have assets valuing $2,000 or less.
Your residence is generally excluded in determining the value of your property or resources. Nevertheless, it is still relatively easy to spend all your savings before Medicaid will start paying for necessary long-term care expenses. Medicaid planning is a useful strategy for preventing that from happening.