Doubling Up On Benefits!

These days there is a lot of talk about the aging population, health of Social Security and Medicare, Obamacare’s Medicaid expansion, and the rising cost of necessary medical care.  Understanding how all of these topics interplay with each other can be a daunting task for anyone.  Often, for someone who is ill, it is the last maze anyone wants to attempt to navigate!  Determining whether you are eligible for various programs and the choices available is often a good first step.

Federal programs do not overlap payments for any given procedure.  However, it is possible for individuals to be enrolled in multiple federally funded medical programs at the same time.  For example, most seniors over the age of 65 qualify for Medicare.  Usually, seniors may enroll in Medicare Part A without paying monthly premiums and Medicare Part B at relatively low premium rates.  Additionally, Medicare Part D is available for drug coverage.  Enrolling in Medicare when you are first eligible may be necessary in order to avoid penalty payments as well.  The Medicare system provides a good baseline insurance program for seniors, but is not enough to pay for ongoing care needs. 

For low income seniors, Medicaid (Medi-Cal in California) may provide the solution.  Although the asset and income levels necessary to qualify are very low, singles and married couples can benefit significantly by planning ahead of time for their eligibility.  If you qualify, Medi-Cal will pay for the majority of long-term health and medical costs during your life.  However, the Medi-Cal system must be notified of your death when it occurs and will often make a claim against your estate to recover its costs!  By properly considering Medi-Cal cost recovery, you can make use of strategies that will reduce or eliminate the state’s ability to collect from your estate.  The earlier you plan for Medi-Cal eligibility, the better.  Medi-Cal imposes a “look back period” in which the state looks at the applicant’s financial records to determine whether the applicant made any gifts prior to applying.  If gifts were made, the state will often impose a penalty period of ineligibility.  It is likely that California’s look back period will increase, making it harder to reduce penalty times.

Additionally, veterans may qualify for VA health benefits.  The VA provides healthcare at its own facilities and offers low copays and prescription drug coverage to many of its enrolled veterans.  Furthermore, the VA sometimes approves charges for care a facilities outside the VA system.  In these instances, it is possible that both VA health benefits and Medicare can be applied.   The VA also provides Aid and Attendance Non-Service Connected Disability Pension benefits to individuals who are unable to take care of many of their daily health needs including bathing, cooking, or eating.  Aid & Attendance may provide a better solution when long-term care is needed than Medi-Cal because the Department of Veterans Affairs does not use cost recovery methods in order to get its money back from your estate.  Again, income and asset requirements must be met in order to qualify for Aid & Attendance.

Federal and state medical programs can alleviate a lot of the financial pressures that result from failing health.  However, it is important to understand the exclusions and limitations from the programs for which you qualify to avoid being left without coverage.

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