What is Medicaid Planning?

I am often asked “What is Medicaid Planning?” Let’s break that down.

Medicaid is a government program that unlike Medicare will pay for long term care costs in a nursing home, however, it has strict financial limits. Medicaid planning is simply the process of acquiring Medicaid eligibility while preserving as many of your assets as possible.

I’d like to take this opportunity to answer a few of the most common questions that I get:

How much money do I need to have to make Medicaid planning worth it?

-Any assets above the Medicaid limit (currently $2,000 for a single applicant and $119,220 for the applicant’s spouse) are an opportunity for planning.

I’ve heard there is a five year look back but we don’t have that long before we need Medicaid, is there anything we can do?

-Yes, even within the five year look back you have planning options. For instance, you could purchase non-countable asset or buy a Medicaid compliant annuity.

I talked to Medicaid and they didn’t offer me any of the planning ideas that you have given me, is this even legal?

-Talking to Medicaid about planning opportunities is like discussing tax deductions with the IRS; they won’t deny you a legitimate one, but they certainly aren’t there to help you find one. And yes, Medicaid planning is perfectly legal, just like tax planning is perfectly legal.

Do I need to sell my house to get on Medicaid?/Will Medicaid take my house?

-No to both; at least while you are alive. Since your home is not a countable asset, it will not prevent you from receiving Medicaid. After you pass away though, Medicaid can put a lien on your home in the amount of the services they have provided you. The good news is that if the lien exceeds the value of your home, Medicaid will only take your home and your children will not owe the difference.

As a final note, remember that no two situations are exactly the same and you should base your Medicaid decisions on a professional’s guidance and not what happened to your grandmother’s best friend’s cousin.

Editor’s note: This article was submitted by Ryan N. Morey, Esq. an elder law attorney with Morey Law, P.C. and may be reached at (719) 465-4324 or ryan@moreylawpc.com.