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Q. What is Medicaid?
A.
Medicaid is a federally funded,
state-operated program that pays health
and medical costs for people whose
income and financial resources fall
below a certain level. It is
administered by the Department of Social
Services in your area.
Q. Why would I need it?
A.
Because the spiraling cost of
health-care can quickly drain your
finances. In the event of a major or
extended illness, even people who
consider themselves well-off financially
could be applying for Medicaid benefits
in a matter of months.
One example is nursing home care. Due to
the high cost of care, many nursing home
residents exhaust their savings after
only a few months and become dependent
on Medicaid.
Q. How do I qualify for it?
A.
Medicaid eligibility requirements are
strict and vary from state to state. In
all cases you are permitted to have only
a limited amount of financial resources.
Examples of things counted as
resources include bank accounts, bonds,
stocks, real estate (except for your
home), and cash value life insurance
policies.
Q.
Would investing in a funeral arrangement
plan affect my Medicaid eligibility?
A.
It could. Some types of prepaid funeral
plans are counted as resources.
Those plans could possibly disqualify you from
receiving Medicaid benefits.
Q.
Are there any prepayment methods that let
me stay eligible for Medicaid?
A.
Yes. For example, a term life
insurance policy used to fund a pre-need
funeral. This kind of policy is
nonrefundable and therefore has no "cash
surrender" value. It is not counted as a
resource when you apply for Medicaid.
That means you can select the funeral
arrangement of your choice and still
qualify for benefits. Be aware that some
other types of pre-need arrangements
limit the amount of life insurance you
can have.
Q. What else should I ask when
making my selection?
* If
the plan is funded through a trust, find
out at what point the total cost of your
funeral will be covered. You should also
ask who is responsible for paying the
taxes on the interest earned.
* If it is an insurance program, find
out if the total cost of your funeral is
fully covered from the time the policy
is issued.
* Ask if the prepayment arrangements you
are making guarantee that you or your
family will never have to pay any
additional amount.
* Before you purchase any funeral
prepayment plan, be sure to discuss the
arrangements with the Department of
Social Services in your locality.
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