Planning long-term care for yourself or an aging loved one in California can be complicated. In addition to meeting the needs of your loved one, you also must figure out how to deal with the cost.
Dangers of using Medicaid coverage
Medicaid can help pay the expenses of a nursing home and other long-term care options. There’s no upfront cost, and you must prove that you fall under a certain tax bracket to qualify.
If you qualify, there’s a chance that you’ll end up owing the government because of the Medicaid Estate Recovery Program (MERP). After your loved one passes, MERP will try to collect on the estate to recoup some of the losses spent on their healthcare.
What exactly is MERP?
The U.S. Department of Health and Human Services uses MERP to recover costs for various types of medical assistance. This includes nursing home care as well as the following:
- Home and community-based services (HCBS)
- Hospital services
- Drug services
- Any other services covered by Medicaid
MERP only applies to people who received Medicaid benefits over the age of 55 or permanently institutionalized individuals. Ultimately, if your loved one was receiving Medicaid benefits upon their death, MERP might come into play.
What assets does MERP try to collect on?
Assets – such as houses, cars, etc. – that were solely owned by the deceased could be used to recoup losses under MERP. However, if these assets are immediately transferred upon the person’s death to another beneficiary, MERP can’t collect them.
Some states will have varying rules regarding MERP, so it’s important to familiarize yourself with these rules. Ultimately though, the best way to ensure MERP doesn’t impact your assets is to draw up a thorough estate plan that transfers the assets to someone else immediately upon your death.