Medicaid is a jointly funded program between the federal governments and states that was created for the poor to have access to medical care. Medicaid is a “means tested” program that measures family incomes against income parameters to determine eligibility. If you are wandering why we are discussing Medicaid in a book about seniors, two facts will make this inclusion abundantly clear:

1. There are 9 million “dual eligibles” which means they are eligible for both Medicaid & Medicare. These “dual eligibles” represent 20% of both programs but a 1/3 of the total cost due to the fact that these patients are more likely to have poor health. Medicare takes over with payments on hospitals, physician services, hospice, and skilled nursing facility care. Medicaid takes care of the home health services. 
2. Sixty percent of all nursing home care costs in the US currently go through our Medicaid system. This occurs because once a nursing home resident has less than $2,000 of countable assets then Medicaid will take over. The caveats are that not all nursing homes take “Medicaid beds” and the ones that do will usually limit those beds to a certain number. Eligible Expenses that are not considered as “countable assets” include paying off a mortgage, prepaying a funeral, replacing an older car, home repairs and buying a new home. 

Action Step: Spend Down means spending your assets down to a level (which is usually around $2,000 of countable assets) where Medicaid will need to take over.

Golden Nugget: “Claw Back” – States have been going after some heirs of deceased seniors that used Medicaid to pay for they’re nursing home bills. The states look back at the five years before the senior declares he is “out of money” and needs Medicaid to pay the nursing home bills. States were forced to start these actions due to some seniors who would pass their assets on to their kids when their health started to fail and then would expect Medicaid to pay for they’re nursing home care costs.