Thursday, April 25, 2013

Confusion about Medicaid Planning

    In recent years, the number of seminars regarding Medicaid planning available to senior citizens has rapidly increased. While Medicaid planning is a portion of our practice, we often find that clients who believe they need Medicaid planning lack sufficient information about both the benefits of Medicaid and the Medicaid qualification process. 
     First, proper Medicaid planning does not involve assisting the client in hiding assets from the government, nor does it include any legally or ethically questionable actions. Proper Medicaid planning does include assisting clients in the Medicaid application process and using available strategies to ensure that a greater portion of the client’s assets remain available for non-Medicaid spouses or go to family members instead of getting consumed by the costs of long-term care. 
     It is important to remember that the process of qualifying for Medicaid means reducing the client’s assets and income to a very low value. Before engaging in such reductions, it is important for the client to understand what benefits Medicaid provides, because while Medicaid is often called “the best insurance money can’t buy” Medicaid qualification does mean a substantial limitation on the client’s care choices. Often, when faced with the reality of Medicaid, clients who previously expressed concern regarding what their children will inherit realize that their hard work and responsibility should result in their own increased comfort. 
     As I stated earlier, many clients come to us with Medicaid planning questions after attending a seminar presented by an “elder law” advisor. While some of these seminars provide senior citizens with good information and encourage them to explore options, there are many operated by less scrupulous individuals that exist to take advantage of seniors. When our clients ask about Medicaid planning we first discuss the scope of care choices that their current financial situation provides. Then we discuss the health issues that the client believes may lead to the need for long-term medical care. Finally, we address the scope of Medicaid benefits. Only then, if after those discussions the client is still interested in the planning process, do we begin discussion of the assets that Medicaid planning may protect for the benefit of spouses or loved ones. 
     Medicaid qualification is a complex area of law and clients should discuss any planning, gifting, or divestment of assets done in anticipation of a need for Medicaid with their advisors and attorneys in order to avoid actions that leave the client without sufficient assets and unable to qualify for Medicaid benefits.

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