Month: January 2023

The term “senior care” is a broad term for all long-term care support available to help someone age in place or in a senior living community. Some may consider a Medicare Advantage (also known as Medicare Part C) plan to help pay for certain senior care services. In this article, we’ll share insights on how Medicare Advantage could cover senior care and how these plans compare to original Medicare. 

Original Medicare, at its core, covers certain inpatient and hospital visits, and it doesn’t cover many nonmedical services seniors need. Some Medicare Advantage plans may cover additional long-term care services that original Medicare doesn’t, and here’s what you need to know. 

What kinds of senior care services could Medicare Advantage (Medicare Part C) plans cover? 

Exact Medicare Advantage service coverage varies from plan to plan and county to county. The primary benefits that you’ll find in Medicare Advantage plans include:

• •Dental.
• •Vision.
• •Hearing.

In addition to these benefits, plans can add and include more benefits to help members and their families stay healthy. According to ATI Advisory, many new supplemental benefits are not primarily health related, making it easier for seniors to access nonmedical services. Some of those include: 

• •Meal support.
• •Food and produce. 
• •Nonmedical transportation.
• •Pest control.
• •Air quality equipment.
• •Social needs interventions.
• •Therapies that complement care.
• •Self-direction support.
• •Home modification.
• •General support for living.

More specific offerings from certain plans we’ve researched include: 

• •Wigs for chemotherapy. 
• •SilverSneakers, a fitness program.
• •Part B payback programs.
• •Remote patient monitoring.

Select benefits are offered through plans that are designed for dually eligible members (individuals who are eligible for both Medicaid and Medicare), which are called D-SNP plans. 

Who is eligible for Medicare Advantage? 

You can sign up for a Medicare Advantage (Medicare Part C) plan if you are eligible for or enrolled in Medicare Parts A and B, also known as original Medicare. The minimum age to use Medicare services is 65; however, you can enroll up to three months before and up to three months after your 65th birthday. 

This time frame spans seven months, also known as your initial enrollment period. There are also annual enrollment periods each year.

Medicare Advantage vs. original Medicare

Medicare Advantage is a private insurance option for Medicare-eligible individuals. All Medicare Part C plans must offer the same essential benefits as original Medicare, including parts A (hospital insurance) and B (medical insurance). 

You do have to choose between Medicare Advantage and original Medicare; you can’t use both simultaneously. 

One key difference between Medicare Advantage and original Medicare, according to Lynn Smythe, the Content Manager at Medicare Benefits Solutions, is that “many people also opt to get a Part D prescription drug plan in addition to their original Medicare, while most Medicare Advantage plans include prescription drug coverage.” 

If you or your loved one uses a lot of prescriptions, that may be an essential consideration in your search for a plan that suits your needs. 

Benefits and drawbacks of Medicare Advantage and original Medicare

You might want to use either option for several reasons, and we’ll lay out a few pros and cons for both. 

Pros of Medicare Advantage

• •You can get additional coverage that you traditionally wouldn’t get in Medicare.
• •Some plans have $0 monthly premiums.
• •Medicare Advantage has proven results with certain conditions. A 2022 study shared that Medicare Advantage members with complex care needs didn’t go to the hospital or require emergency department visits as often as their non-Medicare Advantage peers. 
• •Medicare Advantage plans also have an out-of-pocket maximum.

Cons of Medicare Advantage 

• •These plans aren’t available everywhere.
• •Medicare Advantage plans have closed or restricted provider networks.
• •Serious illness and certain conditions may result in high costs that a member can’t afford.

Pros of original Medicare

• •You can choose any provider you want if they accept Medicare.
• •Original Medicare plans will cover most of your medical needs.

Cons of original Medicare

• •There are no out-of-pocket maximums.
• •There are penalties for signing up late (if you miss your initial enrollment period after you turn 65).
• •Medicare is working off of a limited and shrinking budget.

Again, there is no right or wrong answer regarding original Medicare or Medicare Advantage, and it’s important to make a choice that is best for you and your family’s situation. 

Conclusion 

There are major differences and similarities between original Medicare and Medicare Advantage, and there’s no right or wrong way to choose coverage. 

Medicare Advantage plans cover many senior care services, and you can use these tips to find a plan that works for you and your family’s unique situation.

The majority of people aged 65 and over will need long-term care at some point. And while the average price of long-term care varies depending on your location and level of need, expenses can add up. Luckily, many financial products exist to help people save money and plan for care they’ll need down the line. A long-term care annuity could be one solution for saving to pay for senior care. Here, we explain how it differs from other annuities, its benefits and drawbacks, and how to use a long-term care annuity to pay for senior care.

What is an annuity?

Annuities are customizable financial products you get from insurance companies. You pay a premium, either upfront in a lump sum or in payments over time, then receive a stream of income from the insurance company later. 

There are two different types of annuities: immediate and deferred. An immediate annuity provides a stream of guaranteed income without a long waiting period. The income payments from a deferred annuity begin after a specified period of time or at some future date. With these general annuities, the annuitant can use the money they receive to pay for any expenses the individual deems necessary.

What is a long-term care annuity?

Long-term care annuities are different because they focus benefits on people who want to pay for senior care services. This is a type of deferred annuity with long-term care features. They are either built into the annuity or added to the contract as a rider. Like standard annuities, long-term care annuities can be funded with an initial lump-sum payment or over time in installments. 

These types of annuities can also be fixed or variable in nature. A fixed annuity may be preferable for those who want to fund long-term care, as it is generally considered safe with a guaranteed and predictable flow of returns. Variable annuities carry more risk but present a possibility for higher returns if the underlying investment portfolio performs well.

Long-term care annuities allocate two pools of funds: One pool is for long-term care expenses, which is accessible immediately if required. Another pool for general expenses can be used how the recipient deems necessary; however, it is paid according to the terms and payment schedule in the annuity contract. For long-term care expenses to be paid, the individual must qualify by meeting certain health criteria.  Typically, this means demonstrating a need for help with activities of daily living, such as eating, getting dressed, bathing, using the bathroom, and walking around. The health condition can be temporary or permanent.

Payments from the long-term care fund are usually paid as a multiple of the normal monthly payment that would be payable from the annuity for situations other than long-term care. In most cases, if the annuitant qualifies, this means double or triple the regular monthly payout, usually for a limited period of time.

What is the best age to purchase a long-term care annuity?

There are many factors to consider when determining the best age to purchase a long-term care annuity. Still, it is usually best not to start the annuity too young for someone in reasonably good health and a sufficient income from other sources. 

Most financial advisors suggest a good age for starting an annuity and obtaining the best possible payout would be between the ages of 70 and 75; however, the best time to purchase an annuity can vary among individuals with different circumstances and needs.  

For those younger than the optimal age span, there can be many alternative options, such as a 401(k), IRA, certificate of deposit (CD), or bond. The best investment can vary based on the individual’s distance to expected retirement age, financial means, and long-term priorities. 

Pros and cons of a long-term care annuity

Although there are many benefits of using a long-term care annuity to help pay for senior care costs, they may not be a good solution for everyone. Individuals considering the purchase of these contracts should carefully consider both the benefits and drawbacks before moving forward with a purchase.

Pros of a long-term care annuity

• They help someone put away a lot of money for retirement and defer taxes on these funds.
• Unlike other tax-deferred retirement accounts, like 401(k)s and IRAs, long-term care annuities have no contribution limits.
• These policies can serve as a complement to other sources of retirement income, such as Social Security and pension plans.
• Long-term care annuities may work well for someone looking for senior care coverage without purchasing a separate long-term care insurance policy. Annuitants can benefit in two ways: a regular annuity payment that creates dependable retirement income and the option to use it for long-term care expenses if necessary.
• Getting approved for a long-term care annuity may be easier for those with pre-existing health issues than a long-term care insurance policy. Applications requiring the disclosure of health information are required with both policies. Still, many conditions that prevent approval of a long-term care insurance policy will not impact approval for an annuity. Certain conditions, however, such as Parkinson’s disease, may prevent eligibility for coverage with either a long-term care annuity or a long-term care insurance policy.
• Long-term care annuities could be easier on a person’s financial budget than long-term care insurance. Long-term care insurance premiums are dependent on several factors, including the applicant’s place of residence, age, gender, whether coverage is requested for just the applicant or the applicant’s spouse as well, the length of benefit payouts desired, and the amount of benefit to be paid. Age and overall health can affect the premium for long-term care annuities, but it may cost less than a long-term care insurance policy.

Drawbacks of a long-term care annuity

• The first and most basic principle to understand is that any type of annuity can be complex. Potential annuitants should talk with the provider and fully understand the policy terms before deciding.
• Individuals may be required to make a large upfront premium payment to purchase the policy. The insurance company will calculate the amount of that payment based on the applicant’s risk or what they consider the senior care needs will be for that individual at some future time. Finding the funds to purchase the policy could be difficult, especially if the applicant doesn’t have a significant savings account. Selling investments or withdrawing money from a 401(k) or IRA may be possible, but there may be tax ramifications depending on individual circumstances. 
• There may be tax implications involved in various aspects of an annuity policy. Before deciding to purchase an annuity, individuals should know how distributions, early withdrawals, and monies left to heirs are taxed.
• Fees are typically embedded in the contract, which can vary from insurer to insurer.  These fees can add up. Anyone considering the purchase of an annuity, like any other contract, should review the fee disclosures and compare the fees of similar annuities from other companies.
• The annuity’s guarantees are only as strong as the financial strength of the insurer issuing the contract. Annuities are not backed by the FDIC (Federal Deposit Insurance Corporation) like bank accounts.
• Inflation can erode the value of annuities, like many other investments. Those considering an annuity should check to see if the insurance company offering the policy has provisions to adjust for inflation, such as an inflation protection rider or cost-of-living adjustment rider.

Long-term care annuities can work well for someone looking to protect their retirement nest egg from being drained by long-term care expenses. But, it is generally not advisable to tie up most of one’s assets in an annuity since the capital is no longer liquid once the payment is made.  Additionally, although the income is fixed, it will inevitably lose purchasing power over time due to inflation. But this product does present two significant benefits to the individual looking forward: a monthly annuity payment that can be used to enjoy retirement living, and the recipient can access long-term care benefits if needed.

People become more vulnerable to many health conditions as they age, some requiring long-term care, but paying for long-term care can be costly. The Program of All-Inclusive Care for the Elderly (PACE) helps seniors get necessary medical care for chronic health conditions while remaining at home. The program offers various services and helps older adults age in place — or continue to live in their homes for as long as possible — while getting the senior care services they need. Here, we describe how the PACE program works, its services, and how you can find out if there’s a PACE program in your area to help you pay for senior care. 

What is the PACE program?

PACE is a Medicare program that provides seniors and people over age 55 living with disabilities with home-based and community-based care. Those benefitting from the PACE program require significant medical treatment and consistent care. PACE allows its beneficiaries to gain flexibility in care without being bound to a nursing home or long-term care institution. PACE participants receive care from a team of medical professionals who work together to provide comprehensive care. PACE is permanently available for seniors who are also eligible for Medicaid.

How does PACE work?

Seniors qualifying for Medicaid are not charged a monthly premium for long-term care PACE benefits. If you qualify for Medicare but not Medicaid, you will pay a monthly premium to cover Part D drug coverage and the long-term care portion for PACE benefits. No copayments or deductibles exist for any services, including prescription drugs or visits from approved care providers. The amount of your monthly premium depends on your financial situation.

The PACE program covers the care you would receive through Medicare and Medicaid if your PACE health care team finds it medically necessary. PACE may cover prescription drugs, transportation to and from doctor’s appointments, in-home health care, hospital stays, and appointments with providers. Medicaid and Medicare will reimburse the PACE program for the services provided to participants.

[Learn more about Medicare vs. Medicaid]

Who is eligible for PACE?

Seniors who meet these requirements are eligible to participate in the PACE program:

• • The participant is 55 or older.
• • The senior lives in an area covered by PACE.
• • The participant needs nursing.
• • The senior can live safely in their community.

What services does PACE provide?  

PACE is the sole provider of Medicaid and Medicare services for seniors who qualify for Medicaid and Medicare. The PACE program covers the following services:

Medical care by a PACE physician

To maintain their overall health, seniors must visit a physician regularly. Seniors covered by this program can see a PACE physician. PACE participants can see a doctor familiar with their medical history and treatment preferences.

Medical specialist care

Seniors with chronic illnesses likely require medical care from a specialist. PACE covers visits to specialists in these fields:

• • Optometry.
• • Podiatry.
• • Diabetic care.
• • Cardiology.
• • Rheumatology.
• • Dentistry and dentures. 
• • Audiology.
• • Women’s well care.

Inpatient and outpatient services

PACE provides inpatient and outpatient services. Seniors may require expensive care as they age. Examples of inpatient and outpatient services covered by PACE include:

• • X-rays.
• • Radiology.
• • Emergency room visits.
• • Outpatient surgery.
• • Inpatient rehabilitation.

Medical equipment

The PACE program pays for medical equipment, including walkers, wheelchairs, diabetic testing supplies, and hospital beds.

Home health care services

The PACE program provides in-home care for seniors. Chronically ill seniors require home health care, which can quickly become expensive. In-home nursing assistance, help with household chores, and other necessary services are covered by PACE.

Community-based services

PACE provides all medically necessary transportation services. PACE program participants can get a ride to all PACE centers and transportation to doctor’s appointments in their communities.

Family caregiver support

Caring for a loved one with chronic health issues can be incredibly taxing on family members. PACE offers respite care to family members and caregivers.

The goal of the PACE program is to help participants remain in their homes, and having proper family support is crucial to achieving that goal. Respite care helps family members who play a caretaker role get the rest they need and remain healthy to continue caring for you.

Where can I find a PACE program in my area?

Although PACE is a beneficial program, it is not widely available in every state. PACE programs face logistical issues that limit the availability of services, including creating a team filled with members with varying skills and a patient population large enough to make the financial sacrifice of creating a PACE program viable. As of December 2022, 149 PACE programs are operating in 32 states.

If you are considering applying for PACE benefits, contact your local Medicare office or visit the Centers for Medicare and Medicaid Services National and Regional Resources page to determine if your state has an active PACE program. 

What is Medicaid planning?

Medicaid planning is a form of estate planning focused on helping a disabled person or senior pay for long-term care. Through the Medicaid planning process, an applicant can get help with each stage of the application process and avoid common mistakes. There is no singular way for someone to get this help. Medicaid planning can be as simple as only including aid with the application or as complex as attempting to restructure an applicant’s assets so that they meet the resource limits imposed by the program. Here, we give an overview of Medicaid planning, how you can get Medicaid planning assistance, and some common strategies that people use.

Why should I participate in Medicaid planning?

Applicants and families generally participate in Medicaid planning because it helps them avoid mistakes that would cause the applicant to be ineligible for coverage. It is easy to be ineligible or become ineligible for the Medicaid program. Spending time preparing for the application process can increase an applicant’s chances of receiving Medicaid acceptance.

It’s wise to prepare early for Medicaid enrollment. Getting long-term care before the need arises is important because it gives you and your family more time to work out any issues preventing you from qualifying for Medicaid coverage.

Some reasons to engage in Medicaid planning include:

• • Avoiding simple errors that would make you ineligible for Medicaid coverage.
• • Protecting family assets (including the family home) from the Medicaid Estate Recovery Program.
• • Ensuring assets remain in your estate so your children can inherit the property you leave for them.
• • Helping pay for long-term care and ensuring access to the medical and home- and community-based services you need.

How much does Medicaid planning cost?

The cost of Medicaid planning depends on the assistance you receive. Below is a list of professionals that can help you plan for applying for Medicaid coverage. Their fees range from free to several thousand dollars. You can also attempt to apply for coverage on your own, but without the experience of a trained professional, you may be vulnerable to losing Medicaid eligibility.

Where can I get professional Medicaid planning assistance? 

Applying for Medicaid coverage can get complicated. A single wrong step can cause your application to be denied. You may benefit from the experience of a knowledgeable professional to assist you during the application process. Here are some types of professionals you can enlist to get competent help as you apply for Medicaid.

Elder law attorney

An elder law attorney is a licensed attorney representing seniors with end-of-life legal matters. The attorney you choose should also have experience in Medicaid planning. All elder law attorneys help seniors with end-of-life legal matters, but not every attorney has expertise in Medicaid planning, so it’s important to find the right one.

Public benefits case manager

Public benefits case managers work for the state. They may be an economic choice because they generally do not charge for their services (because the state employs them), and they have extensive knowledge of the Medicaid system. They may help you avoid becoming ineligible for coverage.

Community-based Medicaid planning professional

These professionals help Medicaid applicants with assets that exceed the resource limit set by the agency. The downside of using their services is they are compensated through commissions earned if you buy a Medicaid annuity. Their paychecks depend on you purchasing an annuity, so you should be cautious about choosing the right one.

Insurance agent

Your insurance provider may be able to help you navigate the Medicaid application process. As with community-based Medicaid planners, you should know the agent’s motive to sell you a product. The insurance agent is loyal to the insurance company, and their focus is on profit. The company earns money by selling its customers insurance policies. You may learn valuable information about protecting your assets, but do not be surprised if the insurance agent attempts to sell you a policy.

Financial planner

If you have a financial planner, speak to them candidly about your desire to apply for Medicaid coverage. Ask them if they have experience or a specialty in elder care. These professionals usually have a wide range of skills to help protect your assets as you transition through different stages in life.

State health insurance program counselor

The state trains these professionals to provide unbiased advice to seniors and other Medicaid applicants. State counselors are typically experienced in working with applicants for state public benefits. They do not charge for their services.

Medicaid planning strategies 

There are some strategies you and your family can use to put yourself in the best position to get Medicaid coverage while protecting your property. You should speak to one of the above professionals to protect your assets, home, and income.

Asset protection

Medicaid spend-down is the process of a Medicaid applicant depleting their assets to become financially eligible for benefits. Medicaid spend-down works by the applicant gifting or selling their assets for fair market value to reduce their resources so they fall under the asset limit set by the program. An applicant can spend down by paying off credit card debt, paying off their mortgage, and buying medical equipment not covered by insurance, among other ways. Spend-down acts as asset protection because it is an appropriate way for applicants to move their assets to ensure they remain or become qualified to receive coverage.

Income protection

Medicaid counts income as assets for resource calculation. Your application may be denied if your income exceeds the resource limit or if your income combined with other assets puts you over the asset limit. A qualified Medicaid planning professional can help you create a Miller Trust or find ways to spend your extra income so your resources fall under the limit.

Home protection

Many applicants are unaware of the risk to their homeownership after receiving Medicaid benefits. Medicaid is repaid for the assistance it provides during a beneficiary’s lifetime. After their death, Medicaid has the right to pursue the beneficiary’s estate, including their home, to collect the money spent on their care. You can protect your interests in your home through trusts, child caretaker exceptions, and sibling exceptions.

Penalties for abusing Medicaid planning laws

Medicaid fraud and abuse are illegal in every state. Keeping Medicaid planning services free of fraud and abuse is important since the funds used are federal and limited to those in need. Committing Medicaid fraud is a felony in most states. Punishment may vary based on the facts of the offense and the state where the defendant is charged and convicted. Penalties for Medicaid fraud and abuse may include:

• • Jail or prison time.
• • Probation.
• • Restitution.
• • Fines.
• • Civil penalties.

If you have questions about applying for Medicaid benefits and avoiding pitfalls that may cause you to become ineligible for coverage or land you in legal trouble, contact a professional in your area.

Medicaid is the largest funding source for long-term care and supports, according to a Congressional Research Service 2022 report. People in certain populations and those with lower income have Medicaid pay for long-term care; however, certain long-term care services are not typically covered. Since Medicaid is run both federally and by each state, the Medicaid waiver program helps solve this issue. The program allows states to use federal money to cover services not typically covered by Medicaid insurance as that particular state sees fit. Because of this, Medicaid waivers help expand coverage and care for people with Medicaid insurance who need long-term care. Here, we’ll explain the various Medicaid waivers, who is eligible for them, and how to apply for a Medicaid waiver.

What is the purpose of Medicaid waivers?

There is a dual purpose of Medicaid waivers. One goal of Medicaid waivers is to improve access to medical care and increase the quality of life for beneficiaries. Medicaid waivers also help states manage the funds they receive for Medicaid coverage. As a result, states have more flexibility in paying for Medicaid recipients’ long-term medical care.

Medicaid waivers also allow recipients to receive the help they need that they may not be able to afford otherwise.

Types of Medicaid waivers

There are various waivers that each serve a specific purpose, and you may qualify for extended coverage through one of these waivers. Medicaid waivers are found in Sections 1115, 1915 (b), and 1915 (c) of the Social Security Act. There are three types of Medicaid waivers. Each waiver serves a different purpose. Each waiver is explained in further detail below.

Home- and community-based services waivers (HCBS waivers)

Home- and community-based services Medicaid waivers (HCBS waivers) are Section 1915 (c) waivers. They help beneficiaries receive health care services that are outside of what is covered by the program but would nonetheless support a patient’s long-term wellness.

Through home- and community-based Medicaid waivers, states can provide recipients with a virtually unlimited number of services that support their overall well-being. This waiver provides both standard medical and nonmedical services that can help ease the burden of an illness. The following services are available:

• •Home health aides.
• •Case management.
• •Rehabilitative care.
• •Respite care.
• •Personal emergency response systems.
• •Medical and nonmedical transportation services.
• •Hot meal delivery.
• •Counseling services.
• •Assistance transitioning from a nursing home back into the community.

Individuals who need care apply for this waiver through their state’s Medicaid office.

Research and demonstration waivers (Section 1115 waivers)

Research and demonstration waivers give the Secretary of Health and Human Services the power to grant funding for Medicaid demonstration programs. A Medicaid demonstration program is a temporary and experimental program. Medicaid approves demonstration programs and lets them operate for a limited period to test their effectiveness. Demonstration waivers will pay for programs that promote the general purpose of the Medicaid program.

States apply, not individuals. Generally, research and demonstration waivers are granted if the proposal is “budget neutral,” meaning that while the program is active, it will not cost the federal government more money than is allotted for the state’s Medicaid program.

Research and demonstration waivers keep a demonstration program going for five years. Extensions are available and generally granted for three- to five-year periods. States must reapply after each extension. Some Medicaid demonstration programs are made permanent by the agency. You should stay alert about the status of a demonstration program from which you benefit.

Section 1915 (b) waivers

This waiver lets states contract care to managed care delivery systems. Section 1915 (b) of the Social Security Act allows states to restrict the providers that accept Medicaid insurance. Typically, a state must consider the availability of care statewide, the comparability of service providers, and freedom of choice by the patient.

States apply for these waivers. If a Section 1915 (b) waiver is approved, the state can circumvent Medicaid’s requirements for comparability, statewide availability, and freedom of choice for two years.

Section 1915 (b) waivers restrict where Medicaid recipients can receive medical care. A Medicaid recipient may not be able to receive care from in-network providers if a Section 1915 (b) waiver is approved. Patients on Medicaid can only assemble a medical team from professionals within the contracted managed care providers.

Potential downsides of the state receiving this waiver include that recipients must reestablish care with new providers, which will likely result in a gap in medical treatment, and Medicaid recipients may feel dissatisfied with their options.

Who is eligible to receive benefits from the Medicaid waiver program? 

Individuals typically receive the best benefits from HCBS waivers. Each state sets its own criteria for HCBS waiver eligibility. In general, recipients of waivers must meet these requirements:

• •Eligible for Medicaid.
• •The service needed is available in the state where the recipient lives.
• •The recipient needs long-term care services.
• •The recipient’s medical diagnosis would benefit from home- and community-based care not already covered by Medicaid.

Examples of diagnoses that may be eligible for a home- and community-based services Medicaid waiver include:

• •Autism.
• •Cancer.
• •Traumatic brain injury (TBI).
• •Cerebral palsy.
• •Epilepsy.
• •HIV/AIDS.
• •Diabetes.

This list is not exhaustive. You should speak to a qualified Medicaid planning professional to discuss your options regarding Medicaid waivers.

How to apply for a Medicaid waiver

The process of applying for Medicaid is an important part of estate planning. The Medicaid waiver program and Medicaid applications involve strategic decisions. Because Medicaid programs are administered at the state level, each state has its own Medicaid office. Individuals who want to apply for Medicaid or a Medicaid waiver should contact their state’s office to get the application and learn about that state’s application process. 

Long-term and senior care services can be costly. While some insurances help pay for these costs, it’s hard to know which ones do and which ones don’t. Medicaid is a complex part of the health care system that can help pay for long-term and senior care services if you and the care you need qualify. Use this guide to better understand how you could qualify for assistance and how Medicaid can pay for long-term care.

Medicaid is the largest source of funding for long-term care services. The Congress Research Service found that Medicaid funded approximately 42.1% of all long-term care, amounting to $475 billion. Put more simply, KFF found that 1 out of every 6 dollars spent on health care can be traced back to Medicaid. If you are unsure if you qualify for Medicaid or qualify and don’t know where to go next, read on to learn more about what Medicaid covers and how you can get started on your application.

What is Medicaid? 

Medicaid was a federal program that started in 1965, along with Medicare, that provided health coverage for low-income people. Each state’s Medicaid program is run differently with a different set of regulations and rules that it operates within. 

For example, California offers a wide variety of Medicaid benefits through Medi-Cal. Some of those include preventative wellness and chronic condition management programs in addition to devices that enhance therapy. Other states’ Medicaid programs don’t offer this wide of a range, however, your state’s Medicaid page can explain more about its particular offerings. 

How do you qualify for Medicaid?

Individuals can qualify for Medicaid based on their income and family size. Each state’s income level is different; however, across the United States, the income threshold is up to 138% of the federal poverty level (FPL). In 2022, for an individual, the FPL was $13,590. To be eligible for Medicaid, the person could not make more than 138% of $13,590, which is $18,754.20. Therefore, the most an individual could make and be eligible for Medicaid is $18,754.20.

Medicaid is based on the financial and medical needs of individuals and families, including:

• • People who are pregnant.
• • Low-income older adults.
• • People living with disabilities.

There are two ways to apply for Medicaid:

• • Directly with your state.
• • Through the Health Insurance Marketplace, if you indicate that you need help paying for coverage.

Medicaid vs. Medicare

Medicaid and Medicare are very different programs that serve different purposes. Here are a few of the differences between the two:

• • Medicaid is a need-based federal program administered at the state level, creating variance on a more local level than Medicare. Therefore, Medicaid is designed around income rather than age.
• • Medicare is a federal health insurance program for people aged 65 and above. Therefore, Medicare is designed around age rather than income.
• • Medicaid also has more flexibility in offering more targeted care through the introduction of Medicaid Waivers, the Program of All-Inclusive Care for the Elderly (PACE), and Managed Long-Term Support and Services (LTSS). This wide breadth of programs ensures that if a person is in need of some form of care, there will be a solution that fits their needs. 

How can Medicaid sometimes be used with Medicare? 

In 2019, there were 12.2 million Americans who met dual-eligibility requirements, which means they were eligible for both Medicare and Medicaid. These two programs are not mutually exclusive, meaning that they can sometimes be used to complement each other. Some Medicare Advantage (Medicare Part C) plans are built exclusively with dual eligibility in mind, and they’re called dual-eligible special needs plans (D-SNPs). 

What types of long-term care does Medicaid cover?

Medicaid covers long-term care in various settings, including home and inpatient settings. It will only cover facility settings if the required care involves medical services, like wound dressing or medication administration. 

There are essential services that Medicaid has to cover regardless of the state that you live in, including:

• • Certain hospital visits. 
• • Doctor’s visits. 
• • Labs and imaging services.
• • At-home skilled care visits. 

Custodial services, which are nonmedical and can be provided by unlicensed assistive personnel (UAPs), like caregivers, are generally not covered by Medicaid; however, there are Medicaid Waivers that waive those restrictions. 

There are different types of waivers for different populations. For seniors, there are Frail Elderly (FE) waivers that will cover home- and community-based services (HCBS). Medicaid will not typically cover assisted living or continuing care retirement community care unless they have a skilled nursing care wing and the individual requires that type of care. 

How to find Medicaid facilities and services near you 

There are many providers out there, and it’s important for you to find services that provide the care you and your family need while considering the payment sources you’re looking to use. 

One place to start is Medicaid Planning Assistance, a website created in affiliation with the American Council on Aging. You can search for skilled care facilities by zip code, and you can check off Medicare, Medicaid, or VA, and select by your Medicaid enrollment status. 

For primary care, specialists, and hospitals, HealthGrades is a resource you can use to find a provider. Under the “Insurance” section you can select Medicaid or your state’s Medicaid program. For example, Californians could indicate “Medi-Cal” as their selection. 

Medicaid is an entirely different program from Medicare, and these resources are here to help guide you along the way from application, provider selection, and beyond. 

[Last updated December 13, 2023]

Filing a tax return can be confusing and tedious, especially if you’re doing it for another person, like a parent or loved one. As you probably already know, the smallest mistake on a tax return can become a big headache. This is something you’ll want to avoid, of course, especially if you’re a caregiver who is preparing for tax season yourself. Here’s what you need to know about how to file a parent’s taxes.

Find out if the senior needs to file

If you are stressing out about filing a tax return for your loved one, you may be relieved to find out that they may not have to file a return. While this doesn’t apply to every senior, many will qualify. Seniors who are over the age of 65, unmarried, and who made less than $14,700 in nonexempt income (excluding Social Security benefits) are generally not required to file a federal tax return. This income amount increases to $27,300 for those over 65 with a spouse under 65 and $28,700 for those who are over 65 with a spouse over 65.  

However, if the total of half the senior’s Social Security benefit plus their adjusted gross income (AGI) and tax-exempt interest and dividends is over $25,000 (single filers) or $32,000 (married filing jointly), then a portion of their Social Security benefit is taxable. You can look at IRS Publication 554 or ask a trusted tax professional for more detailed information.

Does a senior have to file a tax return if they can be claimed as a dependent?

As with many matters involving the IRS, the answer isn’t as clear-cut as you might have hoped. In most cases, your loved one will have to file a tax return regardless of whether or not they are a dependent if they exceed the income limitations mentioned at the beginning of the article. If their income doesn’t exceed those figures, you’re in luck — your loved one likely won’t have to file a return.

Not filing taxes when you must is a common tax mistake that seniors make — and can cost you. If you find out your loved one doesn’t need to file, that’s one fewer tax return you need to handle, which would be a welcome relief to Q1 of each year. 

Learn the latest tax law changes

You likely don’t intend to add “become a tax expert” to your ever-growing to-do list as you care for yourself, your family, and your parents. But staying current with important changes to the tax code can mean significant savings to you or your parent. 

Unless you deal with a business venture or are an accountant yourself, you likely need not be too concerned with tax code changes to business tax laws. You do want to pay attention to tax law updates to personal taxes on the federal level and changes for your state. Learning the latest federal tax law changes that apply to seniors and caregivers can help you gather the proper information to prepare your tax return, whether you do so yourself or hire a tax professional. You can also ask a trusted accountant about any updates that could apply to your parent if they know the unique financial situation. 

Assemble basic personal information

If your loved one must file a tax return, you’ll have to collect some of their basic personal information to complete their return. To fill out the return, you’ll need the individual’s:

• •Full name.
• •Address where they live.
• •Date of birth.
• •Social Security number.
• •Bank account number and routing number.
• •Previous year’s adjusted gross income (AGI) if you are filing electronically.

If you want to avoid waiting months for your tax return to process, you may want to file your return online. Online returns usually take a few days to clear, whereas paper-filed returns can take months.

The personal details listed above are basic for filing. The one more challenging detail is the person’s previous year’s AGI, which you may need to hunt down. The previous year’s AGI is a validation mechanism should you submit your returns online. It should be fairly easy to find, though, as it’s line 11 on IRS Form 1040.

Prepare necessary documentation

After assembling the basic personal information needed to file a tax return, you’ll need to assemble the documents necessary to complete the tax return. Often, seniors receive income in a few ways, so you’ll have to look for any forms from 1099s or pension, Social Security, or retirement accounts.  

A good rule of thumb is that your parent should receive a tax form from each source of income they have. These forms are typically delivered by mail but are often available online. If you’re unsure if the senior should receive a specific form, don’t be afraid to call the company where the account is held. You’re not the first to have this question, and you certainly won’t be the last. Almost every financial institution will have someone available to answer your tax form-related questions.

Remember that your loved one might not receive any documentation from a Roth 401(k) or a Roth IRA. These types of accounts are entitled to tax-free growth, so in most cases, they won’t owe any taxes on distributions from these accounts.

If you’re uncomfortable preparing the return and can’t afford to hire a CPA, consider utilizing the IRS’s Volunteer Income Tax Assistance (VITA) and/or Tax Counseling for the Elderly (TCE) programs. They’re run by qualified, IRS-vetted volunteers and are free of charge. Click here for more information about these programs and to find locations near you. There are multiple free tax prep help options available to seniors, which you can also take advantage of. 

Decide who will sign the tax return

Once you’ve prepared the return, the last thing you’ll have to do before sending it in is to sign it. If your loved one can sign their own return, they may do so; as long as you were not paid to prepare their tax return, you will not have to sign it. If you were paid to prepare the return, you must have a valid Preparer Tax Identification Number (PTIN) and sign the return at the bottom.  If your loved one is not capable of signing their own return, you may sign it for them — but there are a few things that need to be done before you can do that. First, if you haven’t already, you must obtain a power of attorney for your older relative. You’ll need to attach a copy of the executed POA as well as completed Forms 8453 and 2848 to the return when filing.

Filing your parent’s taxes: The bottom line

Taking care of your tax return is a big enough annual task. When you add the weight of your parent’s taxes, which may be complex, tax season can become stressful. If you find out whether or not they need to file a return first, become updated on the latest tax law changes to prepare the necessary documents, and decide who will sign the return, you can ensure that your parent’s tax return can be filed efficiently — if they need to file at all.

[Last updated December 13, 2023]

It’s no secret tax season is one of the most stressful times of the year. Filing your taxes can be tedious, especially if you aren’t organized going into tax season. Some people may track caregiver expenses or other costs that can be tax deductible, but it can be tough to know how to prepare and stay organized. If you’re tracking expenses, here’s how to easily plan for tax season all year long.

Start planning for tax season now

Many people ask themselves why they would prepare early for taxes when the deadline is still months away. While pushing tax prep off to a later date may feel good at the moment, doing so often leads to extra stress when tax season finally rolls around. Preparing for tax season throughout the year can alleviate some of the stress associated with last-minute tax prep. If you get most of the work out of the way a few months before the tax filing deadline, you will be amazed at how much easier (and potentially even enjoyable) filing your taxes can be. Here are steps to plan for tax season year-round.

Determine which costs can be tax deductible

Before you start tracking receipts, get an idea of which expenses are tax deductible. Unfortunately, medical and dental expenses are only tax deductible if you itemize your tax return. Those who do itemize their return can deduct everyday medical expenses, such as insurance premiums, certain home care expenses, and prescription medication costs, to name a few. If you’re a senior, there are some additional tax deductions you can take advantage of. And if you’re a caregiver, there are also specific caregiving-related expenses that can be tax deductible. 

Keep track of deductible-expenses receipts

Having a handle on all your receipts for deductible expenses is crucial, especially if you are audited in the future. After all, you will likely be required to back up every deduction you take in an audit, so having a tight handle on your receipts is key. Audits typically go back three years and can expand to six years if any errors are found.

Keep your receipts organized

Stacks of receipts can turn into clutter very quickly. Using technology can help you reduce clutter while keeping receipts at your fingertips. Consider your phone or computer as a digital filing cabinet with these steps to keep your expense receipts organized:

• •Take pictures of your receipts. That way, you don’t have to keep the physical piece of paper around for the next couple of years. All you have to do is keep the photo in a safe place on your computer or phone.
• •Label the picture files. If you’re storing the image of your receipt on a computer, you may want to change the file name to something descriptive. A name like that includes the month, year, and type of bill will help you know what the receipt is for without having to open it. Also, if you need to find a receipt from a couple of years ago, all you have to do is search for a simple term instead of combing through years of dusty paper receipts.
• •Use folders in your computer to organize receipt pictures. If you have different types of expenses, you can create a folder for each. After you rename the receipt image file, you can move it to the folder. This can help if you need to add up totals for types of expenses. All the receipts from one kind of expense, like insurance premiums, will be in one place. 

Back up your digitally stored receipts

Backing up the pictures of your receipts is critical. If you discard a paper receipt after taking a picture of it, the picture is the only proof you have of the expense. And while technology is a great tool, it’s not perfect. Computers can crash or get viruses. Users can also accidentally delete files. If any of these things happen and you don’t back up your information, the images could be lost forever. Here are some ways to back up your receipt files.

Use cloud storage platforms

Storing files “in the cloud” means saving files on the internet. Google Drive and Dropbox are both examples of cloud storage. You can create an account with the website and then save files to your account. The platform saves the file for you, and you can access it from any computer or device with internet access. These sites are typically reliable because they have many servers that they consistently maintain and back up. Many cloud storage sites allow you to create an account for free, and you can also upgrade for a fee to access added security and features. Some only offer their services for a cost, so check the options available to see which platform best suits your needs.

Use your own backup hardware

You still have options if you’d rather store your files at home than in the cloud. These days, external hard drives are typically small and cost-effective for home use. You can purchase a flash drive, which you insert into a port on your computer, then copy your receipt files onto it. You can also set up your computer to make automatic backups if you use a larger external hard drive.

Be aware that cloud storage platforms automatically update, so you don’t have to worry about losing files. Using your own backup hardware means it’s your responsibility to back up the files; they’re only backed up when you do it yourself. You may lose those permanently if something happens to your pictures or device between backups.

If you’re using a small flash drive, store it where you will not lose it. They are small and can be easily misplaced.

Get help from a trusted certified public accountant (CPA)

A great CPA is very valuable and worth the cost. Not only can they prepare your taxes for you, but they can also help you make the most of any deductions and credits available to you. While having a CPA prepare your taxes costs money, avoiding the associated headaches and time spent preparing the return may be well worth it. Additionally, a good CPA may find a deduction for you that online preparation software wouldn’t. These additional deductions could put more money back in your pocket and even make up for the cost of the CPA’s services.

Consider a tax-planning session

CPAs aren’t just there to prepare your taxes for you. They are tax experts and can help you develop and execute a plan throughout the year to help you pay only the taxes you need to. Having just one or two tax planning sessions throughout the year with your CPA can put you financially in a much better position. Those planning sessions will also help keep you on track with tax preparation.

Plan for tax season all year long

Contrary to popular belief, tax preparation is not an activity only for April. Tax preparation should truly be a year-round process. Keeping track of your taxes throughout the year and checking in once every month or so will reduce the headache of preparing your return during tax season. Doing so will help you keep more accurate and detailed records of all expenses, and it also has the potential to save you a lot of money.