Plan for your future – it’s a common refrain and, when we think of it, it’s usually in the context of retirement planning, life insurance or leaving a will. Medicaid planning doesn’t come up as often but it can be just as important, particularly when you’re fairly certain you’ll be taking advantage of Medicaid benefits at some point.
Although children and younger adults can be eligible for Medicaid under specific circumstances, the most common application is when we approach retirement age. Everyone in Illinois becomes age-eligible for Medicaid when they turn 65 but, even if you meet the age requirement, there are financial limits placed on your eligibility. For instance, the maximum annual income an individual can receive in Illinois, and still be eligible for Medicaid in 2021, is $17,775. As the household size increases, so too do does the maximum allowable income, but it’s an amount many people will easily surpass.
This is where Medicaid planning comes in. As you approach retirement and you want to access Medicaid, you make financial plans early to ensure that you will be eligible when the time comes. Perhaps you have assets which will be counted against your eligibility; placing those assets in a trust could preserve them for your beneficiaries while, at the same time, removing them from the Medicaid equation.
However, Medicaid has what’s known as a look-back rule, where your financial dealings are scrutinized for a period of time prior to eligibility. Without careful and timely planning, financial maneuvers you make can violate the rule and affect your eligibility. Plan for your future, yes – but do it in an intelligent and timely fashion, to ensure that Medicaid benefits are there when you need them.