Medicaid and VA benefits - how they intersect.

Quite often, when a person needs care, they or their family members have a lot of questions about what benefits might be helpful, and there's a lot of information out there. Two possible benefits are VA pension benefits and Medicaid long-term care benefits.

VA pension benefits are available to wartime veterans who need long-term care. The rating this requires is called Aid & Attendance. These benefits come in the form of a stipend paid to the veteran each month to help with the costs of care.

Medicaid benefits work a little differently. If you need long-term care and qualify for Medicaid (more about that here), then the state pays the difference between your income and what your care costs each month. In this case, the state decides how much a facility or caretaker gets paid for your care.

This week I had a family who reached out to me with a rather common scenario. For simplicity's sake in this example, I'll call the person who needs help Alan. Alan is a widower and an army wartime veteran. He is entitled to VA pension benefits and would also qualify for Medicaid. His daughter contacted me because he needs care and she wanted to know if he should/could use Medicaid to help and if he should also get VA benefits. Alan would qualify for the Aid & Attendance pension rating. So should he use that or Medicaid?

The answer depends a lot on Alan's costs of care and his income. If his income is less than what his care costs, but he only needs a small stipend (say, $1,500 per month) to make up the difference, then VA Aid & Attendance benefits will work for him. If, however, his care is much more expensive and the difference between that and his income is more than $2,300 per month or so, then even with the VA benefits, Alan can't pay for his care. He's going to need Medicaid in that instance. Medicaid will pay that difference for him, no matter how big it is.

Alan's family had also gotten information from a helpful person at his facility. The facility wanted Alan to use VA benefits if possible, because the facility would then continue to get the full private-pay rate for Alan's care. If Alan was on Medicaid instead, then they will only get the Medicaid rate (which is always less) each month. The facility was trying to help Alan's family and gave them the name of a company that obtains VA benefits for veterans.

Though the facility was being helpful, this advice (and I see it a lot) can cause problems down the road for veterans whose care needs get more expensive. Eventually, those veterans need Medicaid anyway. When they utilize a company that only worries about getting them those VA benefits, they may encourage planning that will wreck that veteran's chances to get Medicaid later.

The best thing to do in these situations is to talk to an elder law attorney. We can help with both types of benefits and help plan over the long-term instead of using a short-term solution only. Make sure you talk to someone well-versed in this stuff and not just a company that charges a fee to determine if you're eligible for VA benefits.

If you want to know more about these benefits, you can attend (or watch later) my Webinar on this topic here:

Happy Holidays everyone!

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