Your need for medical support is likely going to increase as you continue to age. While you may currently still enjoy independence, mobility and good health, that can potentially change as you age. When your health declines, your health care costs increase.

Most older Americans presume that Medicare, the federal insurance program that provides coverage to retirement age adults, will meet all of their medical needs as they get older. However, Medicare has some substantial gaps in coverage that can have noteworthy implications for people who will need long-term care as they get older.

Medicare doesn’t cover long-term care needs

Medicare aims to provide basic health coverage to older adults, but it can’t provide full coverage for all people with all conditions. The lack of long-term care coverage is one of the limits of the current Medicare program that can have serious financial implications for older adults.

If you don’t have a supplementary long-term care insurance policy in place already, you may find that purchasing one when you are close to or past the age of retirement will likely be cost-prohibitive. The only option for getting insurance that will cover your long-term care needs might be qualifying for Medicaid, which has income and asset limits.

Medicaid planning can make it easier for you to qualify if you need benefits

Applying for Medicaid when you desperately need the benefits can be a rather disappointing experience. Depending on the type of Medicaid coverage you need, your recent financial transactions may be scrutinized for dozens of months prior to your application or claim.

If the government feels like you made questionable transfers or gifts during the time before your application, you may have to pay out of pocket for a comparable amount of care before they approve you. If your assets are worth too much, you will have to pay out of pocket until your estate shrinks to a size that allows you to qualify.

The sooner you start planning to qualify for Medicaid by transferring ownership of assets to others or using them to fund a trust, the less likely you will be to have to worry about any kind of penalty if you require Medicaid benefits in the future.