Growing older means thinking about how to maximize your finances. Retirement is often a time of cutting back and ensuring you have enough assets to carry you through end-of-life. Someone turning 65 years old today has almost a 70% chance of needing long-term care services in their remaining years, according to the U.S. Department of Health and Human Services. It is wise to plan for a future that includes long-term care.

One of the ways you can pay for long-term care is through Medicaid. Even if your finances would not generally allow you to qualify for benefits, you can still be eligible with the right type of planning before you need care. 

Medicaid can cover the costs of care that your health insurance will not begin to touch. If you start early enough, you can qualify and still have a separate income stream that does not disqualify you from benefits. If you need to qualify now, plan for long-term care by spending down your assets. Making a funeral plan is a good way to work toward qualifying for Medicaid.

Why Plan to Apply for Medicaid?

If you go ahead and plan for Medicaid benefits at least five years before you need them, you can keep your nest egg and still qualify. This type of planning can mean the difference between leaving an inheritance or leaving nothing behind. Most of us would like to have gifts for our family as we leave this world behind. Making end-of-life plans before you need them allows you to save more money for your children’s future.

Qualify for Benefits

If you apply for Medicaid with a household size of 1, your income limit is $17,131. With two in your household, the limit is $23,169. However, according to the American Council on Aging, if your income is less than what it costs to live in a nursing home, you are still eligible for nursing home care assistance.

The assets you may personally own include $2000 for singles and $3000 for a married couple. However, if you plan early, you can still qualify if your income limits and assets are above the maximum.

What Does Medicaid Cover?

Medicaid can cover “community alternatives for home and community care as a cost-effective alternative to institutionalization. Covered individuals are elderly or disabled individuals.” (1)

According to the American Council on Aging:

  • Institutional / Nursing Home Medicaid – is an entitlement (anyone eligible will receive assistance) & is provided only in nursing homes.
  • Medicaid Waivers / Home and Community Based Services (HCBS) – Limited number of participants and waiting lists may exist. Provided at home, adult day care, or in assisted living.
  • Regular Medicaid / Aged Blind and Disabled – is an entitlement (meeting the eligibility requirements guarantees assistance) and is provided at home or adult daycare.

How Does Medicaid Planning Work?

Medicaid has a five-year look-back for your income and assets. If you plan before these five years, you can place your assets into a legal framework called an irrevocable trust. An irrevocable trust is much like a business entity that you create to care for yourself. It can hold money, property, your home, and your vehicle. An irrevocable trust no longer belongs to you personally, but you create how it will operate when you first set it up with your attorney. 

An irrevocable trust helps you plan by guaranteeing the amount of money you receive from it each month. If your income is below Medicaid limits when you hit the 5-year mark, you qualify while retaining your income stream and assets in the trust.

What If I Need Medicaid Now?

If you have missed the five-year look-back period to tuck away your assets safely, you may spend down your assets to qualify for Medicaid care. You can work with Medicaid to determine how much you will need to spend down and what types of things you can buy without triggering a disqualification. 

One way you can spend that will not cause your disqualification includes making a funeral plan and paying ahead. When you make this type of plan, you give a gift to your family. Often family and friends are grieving and exhausted when a loved one passes away. The last thing they feel capable of is planning your funeral. If you haven’t made a plan, it can create stress within your family as they decide what you would have wanted.

The financial stress of paying for your funeral can also create disagreements and difficulties for your family. If you go ahead and plan for a prepay for a funeral now, you save headaches for your family later. With a prepaid funeral, your loved ones can focus on remembering your life.

How Can I Plan?

It makes sense to go ahead and make plans early for end-of-life. Part of that planning is considering how best to use your assets and income. Making your estate plan can set you and your loved ones up for success. Meeting with your local funeral home director and preplanning for end of life can help you qualify for Medicaid. You can stay prepared for the inevitable day that you will no longer be around to care for your family. 

We Want to Help

At Renaissance, we are committed to working with you to preplan for the celebration of your life. Whether you choose cremation, traditional burial, or green burial, we would be honored to discuss your options with you. We can also help you decide on flowers, music, programs, charities, types of services, and any other concerns you may have. Contact us and get started with your plans today.


  1. https://www.benefits.gov/benefit/1390