Once you reach retirement age, you can count on Medicare and supplemental insurance to help you cover your basic medical expenses. For some retired adults, Medicare will be sufficient for their needs. Others will unfortunately realize that Medicare coverage alone is not sufficient. They may require Medicaid coverage, which applies to a broader range of medical treatments.
Older adults can apply for Medicaid to cover rehabilitation care or a stay in a nursing home. You can typically qualify for Medicaid benefits if you have limited personal property, with the exception of your primary residence, and income that is low enough based on state standards when you apply.
The benefits that you receive will pay for a room in a nursing home or skilled nursing support in your own home during your golden years. Will your loved ones pay the price because Michigan will demand reimbursement for your Medicaid benefits after you die?
Michigan does have a Medicaid estate recovery program
You may have heard stories about people who left money or real estate when they died for their children, only to have the state of Michigan intercept those assets during probate proceedings to repay Medicaid coverage in someone’s last years of life. Those rumors have a basis in reality.
Unfortunately, the law does require that Medicaid programs attempt to recover whatever amount they pay out on behalf of a beneficiary from their estate when they die. Although your home won’t prevent you from getting benefits when you apply, it can be vulnerable to estate recovery claims later, even if it is the only real asset you have to leave to your loved ones.
How can you protect the limited legacy you want to leave behind?
When people prepare for retirement, they often start planning their estates. That is the ideal time for an adult to start thinking about their needs as they grow older, including the possibility that they may require Medicaid.
Changing the way that you hold title to your home, moving property into a trust and making strategic gifts well before you might need Medicaid benefits are always to minimize how much you lose to the state of Michigan when you apply for Medicaid coverage.
Addressing your medical needs and the risk that certain coverage might create when estate planning will help you ensure you can leave something meaningful for the people you love.