You may have heard by now that the budget that became effective in July of this year includes some cuts to Medicaid benefits that many disabled Missouri residents are very concerned about. Governor Eric Grietens’ first budget includes cuts to certain Medicaid benefits as well as funding to some in-state human services agencies. This is just another reason why Medicaid planning is so important.
Consequences of Medicaid budget cuts
A non-profit agency in Kansas City, The Whole Person, reports that because of the reduced funding, it has been forced to cut 23 full-time jobs. The Whole Person provides basic human services to individuals with disabilities. One person who depends on the services provided by The Whole Person, Pamela Chavez says she is afraid and disappointed by the situation.
She uses a wheelchair to get around because she suffers from the effects of Osteo Imperfecta, a brittle bone disorder she has lived with since birth. She basically requires assistance with basic tasks around her home, assistance that had been provided by The Whole Person for many years.
These Medicaid cuts may reduce the opportunity for independent living
Independent living is extremely important to Chavez and other individuals living with disabilities. She is among thousands of Missouri residents who do not agree with the reductions to Medicaid-based programs, particularly those that help individuals with disabilities to live on their own.
Why Missouri Medicaid planning is important
For those who are not familiar with Medicaid benefits in general, Missouri Medicaid is basically a health care assistance program operated by each state, under the auspices of the federal government. This need-based benefits program pays for medical services that have been deemed medically necessary by your doctor. Because Missouri Medicaid is a “need-based” program, there are certain limitations imposed on the amount of financial resources an applicant can have. Put another way, if your assets exceed a certain amount, then you may not qualify for Medicaid benefits.
For instance, in order to be eligible for Medicaid, the total value of your assets must not exceed $1,000. Your primary residence is usually excluded from this determination. Still, it is not that difficult to exhaust your life savings and the majority of your estate before Medicaid will pay for your long-term care expenses. Nevertheless, Medicaid planning is a very helpful way to prevent that from happening.
How Missouri Medicaid classifies financial resources
When an eligibility determination is being made, Medicaid will essentially divide your financial resources or assets into two categories: those that are countable for purposes of eligibility and those that are exempt. A countable asset is one that could be used to pay for your medical care. Common examples of countable assets include cash, Individual Retirement Accounts, Keogh plans, securities, annuities, pension funds and the cash surrender value of certain insurance policies.
On the other hand, your primary residence (up to a certain amount), household items, vehicles, personal items, and burial policies or cash set aside for funeral expenses. However, even with these exempt items, they could be subject to recovery after your death, to reimburse Medicaid for benefits paid out.
Some common strategies for Medicaid planning
One important part of Medicaid planning is to use your countable assets to pay off your debts and prepay any real estate taxes and funeral expenses. You can also use your countable assets to purchase non-countable assets, such as a new car or making improvements on your home.
Medicaid trusts are another good option to consider
A Medicaid Trust is a particular type of trust that is commonly used to protect a Medicaid applicants’ assets so they can maintain their eligibility for Medicaid benefits while saving their property. A Medicaid Trust is essentially an irrevocable trust that allows you to name yourself as the income beneficiary while identifying residual beneficiaries to receive the trust property upon your death. There are also many other options, so discuss your choices with your attorney.
Start your Missouri Medicaid plan now
When you or a loved one are considering the need for long-term health care, Missouri Medicaid will typically become an area of concern. If you believe you may need to apply for Medicaid benefits, it is wise to have a Medicaid plan in place to protect your assets. Missouri Medicaid planning is something that should be done as early as possible, so discuss your options with your Medicaid planning attorney now.
If you have questions regarding Medicaid benefits or any other Medicaid planning matters, please contact the experienced attorneys at Gaughan & Connealy for a consultation. You can contact us either online or by calling us at (816) 974-3030. We are here to help!