Medicaid Planning

What Is Medicaid Planning?

Medicaid planning is among the primary responsibilities of experienced elder law attorneys.

Most aging Americans will need some period of extended or long-term nursing care at some point in their elder years. The average cost of a long-term nursing home is now approaching $10,000 per month.  At that price, good quality residential nursing care will exhaust a family’s financial resources in a short time unless they plan to protect those assets and preserve their Medicaid eligibility.

Medicaid Eligibility and Avoiding Asset Spend Down

Eligibility for Medicaid coverage of long-term nursing home care is determined by assessing the value of the Medicaid applicant’s available financial assets and the level of income they receive. After a lifetime of hard work, spending your savings and selling property or assets to pay for nursing care can be heartbreaking. 

Part of comprehensive elder law plan is Medicaid planning. With a properly drafted Medicaid plan, the wealth you hoped to pass on to your children or grandchildren will not be consumed by end-of-life nursing needs. 

If you hold more property and financial assets in your name when you apply for Medicaid coverage for long-term nursing care, Medicaid will disqualify you until your assets are “spent down” to a level within the program’s eligibility criteria. Each state sets a level of assets it exempts from being counted as “available” by Medicaid. The elder law attorneys practicing in your state will know the precise value of each allowable exemption in your jurisdiction.

Medicaid does not allow a soon-to-be nursing home resident to transfer assets to family and friends to avoid having them in their name when they apply for Medicaid coverage. When an application for Medicaid coverage is filed, Medicaid conducts an extensive review of the applicant’s transactions dating back 5 years. 

If any assets were transferred to someone for less than market value, Medicaid will count that transferred asset as though the applicant still owns it. Any disallowed transactions will result in a penalty period of ineligibility during which the nursing home resident must pay their own nursing home bill. 

How an Elder Law Attorney Can Help You Plan for Medicaid 

Meeting with an experienced elder law attorney years before you expect to apply for Medicaid can yield valuable advantages because establishing a solid Medicaid plan will enable your lawyer to position your assets where they benefit you most and are not counted as accessible to you for Medicaid purposes.

Medicaid rules and federal law permit you to use legal strategies like various types of trusts, annuities, insurance, and other instruments to preserve your hard-earned financial assets for your loved ones, and to remain eligible for end-of-life nursing care funded by Medicaid.

It’s Never Too Late for Medicaid Planning

Don’t give up if you think you’ve delayed Medicaid planning too long. Skillful elder law attorneys can usually find significant savings for you even if you did not establish a plan earlier. 

Contacting a Certified Elder Law Attorney (CELA) in your state will get you the help you need to maximize the assets you can still protect from Medicaid reimbursement claims.