Chapter 11

Step 8: VA Benefits and Medicaid - Are you eligible for aid but Unaware?

"Medicaid may be a last resort, but with proper planning you can safely protect you assets from disappearing."- Matt Rettick

Attention, veterans and spouses of veterans – and we're not referring only to career military or military retirees either. You may be eligible for significant benefits, financial and otherwise, as you age. Sure, Uncle Sam has education programs and benefits that you may or may not be eligible for, and, after you die, you probably can get a free burial in a national cemetery. But wouldn't an extra $20,000 a year make a big difference in your ability to afford the care you need in the event of chronic, catastrophic, or terminal illness? The answer to that question probably is a resounding yes.

Without those benefits or advance planning, your primary alternative could be Medicaid. That's the state-administered, federal/state-funded program of financial assistance for medical care for the poor. As we've mentioned, when it comes to nursing-home care, Medicaid picks up the cost of almost half of the nation's more than 1.8 million nursing-home residents. In other words, all those Medicaid recipients are poverty-stricken.

Sound fishy? It's not. Most of those people didn't start out poor, but became that way in order to qualify for financial assistance from the government. They either planned ahead to spend down enough to become eligible for Medicaid, or they were forced into it if they wanted to become eligible by default. Whether you or your loved ones are financially well off, comfortable, or have only enough to get by, you'll have to get rid of your assets (with a few exceptions we'll discuss later) if you expect to get Medicaid relief, without penalty, from the crippling cost of long-term care in a nursing home. With certain exceptions, Medicaid generally doesn't pay for assisted living or home healthcare.

Let's look more closely at the options.

Help for Veterans

As a veteran – there are an estimated 9 million age 65 and older (U.S. Census, 2005 Community Survey) a regular income stream could be available to you or you spouse now or even after your death as financial reimbursement for out-of-pocket medical and care expenses if you qualify. The programs are called Aid and Attendance and Housebound benefits, and those who qualify can receive tax-free:

  • Up to $1,801 a month for a veteran with a dependent spouse.
  • Up to $1,519 a month for single veteran.
  • Up to $976 a month for a surviving spouse of a veteran.