Medicaid and long-term care insurance

It could be anything from multiple sclerosis to a car accident--but suddenly you find yourself in need of some help. Unexpected catastrophes can and do happen. Not often, but often enough that you should be prepared for your future in the event that you need long-term healthcare. Whether it is a nurse coming in weekly or round-the-clock care, most people do not have the means to cover the unexpected cost associated with intensive medical treatment.

Medicaid is a program that is available to cover some of those expenses, and often, if you are unable to work due to your illness or injury, you will find that you qualify for the program. That feels like a relief--and it is. But there are long-term consequences that accompany using Medicaid for long-term care.

Medicaid isn't free

It's a blessing to have help from Medicaid. But the fact is that, in the long run, you will pay for it. By law, the state of Georgia may file a lien against your estate to recover each and every dollar that was paid for your long-term care. The lien may recoup costs for long-term care regardless of the age you were when you received it.

How can they do that?

In 1993, federal law required states to implement rules that would allow them to recover long-term care costs from Medicaid beneficiaries. Georgia implemented its law in May, 2006. If you applied for and received Medicaid for long-term care after that date, you are subject to an estate recovery lien.

Is there a way to avoid it?

There are certain ways that you may be able to avoid an estate recovery lien. The easiest way to avoid estate recovery is to purchase long-term care insurance. These policies vary in what they cover: Some have deductibles and some do not, some cover nursing homes, but not at-home care and some cover hospice.

Simply put, if you have assets you would like to pass on to your children or other heirs, a long-term care policy can help you do just that. While there are other ways of avoiding an estate lien--for example, transferring your assets to family members--these options have look-back periods that allow the government to "claw-back" assets that were transferred within certain time limits. A long-term care policy can cover costs during that time limit, allowing you to transfer assets without fear of them being recouped by the state.

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