Employment makes a professional eligible for a variety of state benefits. People who contribute to different programs through payroll withholding or direct contributions as self-employed professionals may be eligible for benefits when they need them.
Medicare is an example of an earned benefit. People who have maintained gainful employment are often eligible for Medicare coverage during their golden years. Medicare provides basic health benefits to older adults who may no longer be able to afford private insurance or lose employer-sponsored medical coverage when they retire. Unfortunately, Medicare has major limitations that older adults and their families need to understand to properly prepare for the retirement years.
What doesn’t Medicare cover?
Generally speaking, Medicare only covers basic, necessary medical treatment. Medicare typically does not pay for elective or cosmetic procedures. Additionally, Medicare does not cover most dental services.
There are also limits to rehabilitative and long-term care coverage. Medicare may cover short-term rehabilitative support when older adults sustain injuries or need support as they recover after an illness. Typically, Medicare only covers up to 30 days of rehabilitative care or intensive nursing support. Anything beyond that requires a different solution.
Some older adults have enough capital set aside to directly cover long-term care costs. However, in-home nursing support, extended stays at rehabilitation facilities and rooms in nursing homes can cost thousands of dollars per month. If older adults cannot afford that care with their own resources, they may need to apply for Medicaid. Medicaid covers necessary long-term care services that Medicare does not.
Planning for Medicaid is critical
Even when living on a fixed income, older adults may struggle to quickly qualify for Medicaid benefits when they need support. Planning in advance helps ensure that older adults can rapidly secure benefits when they become necessary.
When an older adult applies for Medicaid, the state typically reviews five years of their financial records. The applicant may be subject to a penalty for any large gifts or transfers made within the 60 months prior to their application.
They may have to pay out of pocket for months of support before Medicaid begins their coverage. After they die, their assets could be subject to estate recovery efforts. The best way to avoid those challenges is through careful planning, such as taking on co-owners or establishing a trust well before Medicaid benefits become necessary.
Addressing elder law concerns, such as long-term care costs, can be helpful for older adults and their immediate family members. People who plan in advance can more effectively qualify for Medicaid when they need help and preserve resources to leave a meaningful legacy after they pass.
