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Should I avoid Medicaid?
Old 08-23-2014, 01:47 AM   #1
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Should I avoid Medicaid?

Once retired and before reaching Medicare age, I'll have no income other
than dividends, which will not likely go over the minimum 133% of
the federal poverty level (FPL) required to qualify for ACA. I realize I
could do ROTH conversions and get the MAGI above the 133% FPL to
qualify for ACA and avoid Medicaid.

What are the reasons why I should avoid Medicaid? Is it mainly because of
limited and low quality health services available with Medicaid? Also, would
the government try to recover any received Medicaid benefits from
the assets I'd leave behind to my beneficiaries when I die?

By the way, I live in California.



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Old 08-23-2014, 07:48 AM   #2
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It depends on your state. New York uses various companies to run Medicaid in most counties. In my case, UnitedHealthcare Community Plans is the Medicaid version of what I have at work, which is UnitedHealthcare Choice Plus. All my doctors are in both plans so for me it is a no-brainer. The Medicaid version is better, with almost non-existent co-pays and deductibles.

Any benefits received from ages 55 through 64 are recoverable by estate recovery. However careful planning to avoid Probate court negates the recovery. Life estate trusts for real property, at least in NY, is a proven method of legally protecting your property. Until they change the laws. Each state is different.

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Old 08-23-2014, 08:56 AM   #3
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As the law is written, once you reach age 55 your assets can be taken into consideration for Medicaid, and are subject to recapture. The director of CMS wrote to the State Medicaid administrators indicating they did not intend to pursue that option, but it is current regulation.

One thing worth the effort is to compare the networks for the region where you live - Medicaid vs the Silver Plan option for maximum cost sharing.
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Old 08-23-2014, 10:26 AM   #4
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IIRC you will then be on "Medi-cal in CA. You will be limited to some of the worst providers. Most doctors do not accept medi-cal patients.Avoid this situation if you can.

I'm not completely sure about the financial end, but I think, if you go into long term care, once you are down to $ 2500 in assets, except your primary residence ,you can keep your primary residence, even if not living in it. Medi-cal will then have a lien on it .

If you gift your assets , including your residence , there is a look-back period of about 2-years. This can shield your assets from a medi-cal lein , but talk to an estate planning atty on this. The state is very good on finding hidden assets.
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Old 08-23-2014, 12:02 PM   #5
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I suggest doing Roth conversions to bring your AGI up to the level that qualifies you for a subsidized, private plan from Covered CA. That's what I do.

That level of income for 2015, BTW, is $16,105, which is 133% of federal poverty level for a single person.
And if I claim to be a wise man, it surely means that I don't know.
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Old 08-23-2014, 12:06 PM   #6
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My two main concerns would be your choice of providers under Medicaid and watching out for asset recapture after age 55. If you are under 55, it *might* be worth considering the Medicaid option if you have an acceptable network of providers who will take it (and new patients), but doing whatever you need to do to get over 133% once you reach 55 so you aren't afoul of the asset recapture.
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Old 08-23-2014, 01:10 PM   #7
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What are the reasons why I should avoid Medicaid?
As long as you do not require medical aid you should be fine.
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Old 08-23-2014, 05:03 PM   #8
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My former employer, a very large group in Orange county, used to accept MediCal and I had many MediCal patients. I still have a five-star patient rating on line and do not feel that I or we provided substandard care. To tell the truth, I never bothered to look at a patient's insurance status.

Note that asset recapture occurs after the death of the second spouse.
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Old 08-23-2014, 08:37 PM   #9
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Originally Posted by AllDone View Post
Note that asset recapture occurs after the death of the second spouse.

Well that sucks for the third wife. Poor Margene.

You might find that a silver plan with maximum cost subsidies is very cheap.

For someone with an income of $16,200 (you might not want to skate quite that close) who is age 50, the yearly premium would be $562 and the maximum out of pocket not including premium would be $2250.
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Old 08-26-2014, 01:40 PM   #10
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Exactly. Avoid Medicaid if at all possible, given that the heavily subsidized Silver plans are WAY better in most states.

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