Medicaid is a program of medical assitance financed by each state individually and the federal government for individuals having low income. The program was enacted in 1965, amending the Social Security Act of 1935. It is a large and complex social welfare program.
The Centers for Medicare and Medicaid Services monitors the states regarding their policies for eligibility, services, and payment. Each state may/does have its own program, and these programs vary widely among the states.
The long and short of it is that few who qualify for Medicaid find their financial status very satisfying. It is a means-tested system for providing minimal income and health-related service levels to those with great need. It is not the postion of choice for most people who have worked for decades and have managed some degree of comfort and prosperity.
Sadly, you can end up qualifying for Medicaid when you are least able to do anything about it. Specifically, we are talking about impoverishment occasioned by high, on-going medical/long-term-care expenses. Because we simply do not know if we will have such expenses, or when, or for how long, it is difficult to know if we have enough assets to pay our own way and avoid "Medicaid spenddown".
And make no mistake -- pay our own way we must! Recent tax legislation has made so-called Medicaid planning more difficult, recovery of Medicaid expenditures more expensive and more certain, and remaining options less likely to be palatable to the person considering them.
Of course, there are more positive alternatives available: see our Long Term Care Planning Issues discussion. The biggest winners of doing the right kind of planning is that those with total assets ranging from approximately $250,000 to $1,500,000 or so have a much better chance of holding onto most or all of them.
Without shifting the risk and most of the cost to an insurance company, you can quickly consume "available resources" in that range. If you have assets/net worth greater than $1,500,000 or so, you may do the math and rightly conclude that an effective use of dollars is to shift the risk and the cost, because the insurance company approach can provide considerable, predictable income at the very time it's needed. And for a much smaller amount of money than you are likely to spend on your own ("self-insuring").
Why not find out the facts for yourself? Thoughtful analysis can enable you to appreciate all the issues, and come to an informed decision (either way). The decision often impacts greatly those we care most about. It is, after all, your decision!
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