Medicaid is intended to serve as a source of assistance for those who have long-term health needs, but lack the income and resources to receive necessary care by other means.
Over the last several columns, I have summarized the many rules used to determine if a person qualifies for assistance from Medicaid. Those rules permit a person in need to own a home, a car, a retirement account, perhaps even a business, but still qualify for assistance. This is surprising to many people but actually makes sense. A person cannot be left truly destitute before qualifying for Medicaid long-term care assistance. Otherwise, the government would also be paying for rent, food, clothing, and every other essential expense of living, in addition to providing for health care needs. Instead, a person can qualify for assistance even though he or she still has enough assets and income on which to live.
This does not mean they are receiving assistance for free. Instead of paying for the care up front, the cost of Medicaid long-term care shows up at the end. When a senior receiving Medicaid assistance passes away (or, if they are married, when the second of them passes), the government becomes a creditor to the estate. With very few exceptions, the government is entitled to be paid back the amount it spent providing care. The government’s right to reimbursement takes priority over that person’s children or other beneficiaries. This explains why a recipient is not allowed to give away assets for five years before receiving Medicaid assistance.
While all of us would like to pass on our assets to loved ones, sometimes life’s challenges interfere. In the event a choice must be made between your care and your legacy, I hope the answer is obvious. Medicaid helps ensure that those who need long-term care, but lack sufficient resources, still receive the care they need. However, to receive that care, a person in need is still required to contribute all that he or she can, even if that contribution occurs after death.
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*Steve Wright is an Idaho licensed attorney. This column is provided for informational purposes only and should not be construed as legal advice, which requires a specific discussion of specific circumstances.
© 2025 Steven J Wright