Medicaid is a joint federal-state program that provides medical assistance for individuals whose income and resources don’t exceed certain levels. Although some of the Medicaid eligibility requirements are set by federal law, other requirements are within the discretion of Pennsylvania. Not only do the eligibility requirements vary among states, but, as a practical matter, the way in which the rules are enforced vary from county to county within Pennsylvania. Very generally, an individual has to have no or very few assets of his own to be eligible for Medicaid.
Medicaid should not be confused with Medicare, which covers all individuals age 65 or older who are eligible to receive Social Security benefits. Medicare alone, however, does not provide adequate coverage for long-term nursing home care. So if an individual who is not eligible for Medicaid has to go into a nursing home, the bulk of his assets may be used up by the nursing home bills before he becomes eligible, leaving little or nothing in his estate to care for his non-institutionalized spouse or to pass to his children.
To avoid this situation, it may make sense to transfer assets to an irrevocable trust known as a “Medicaid asset protection trust” or “Medicaid qualifying trust.” The purpose of a Medicaid trust is to make the transferor eligible for Medicaid while preserving his assets for the benefit of his children or other heirs.
If you have elder law questions about long term care and nursing homes for yourself or a loved one, please contact Nic Sasso at (412) 338-1179 or NJSasso@rothmangordon.com.