Medicaid Planning 101

Jul 22, 2022
Estate Planning
Medicaid Planning 101 | AmeriEstate Legal Plan

Indisputable fact of life #1: Most of us will require some form of long-term care during the final portion of our lives.

Indisputable fact of life #2: Most of us will not have sufficient assets to pay the exorbitant costs of long-term care.

Indisputable fact of life #3: Most of us therefore will need to apply for Medicaid in order to receive long-term care benefits.

Indisputable fact of life #4: Applying for Medicaid is a complicated process that requires some serious estate planning well ahead of the time you need to apply.

How Medicaid Works

Medicaid is a variety of programs designed to benefit people with a low-income. It is jointly funded by the federal and state governments, but each state administers its own Medicaid programs and has its own rules and regulations regarding eligibility


 Each state has its own standards for the maximum amount of income you can have  and how many assets you can own in order to qualify for Medicaid benefits.

These eligibility standards are extremely stringent. If you own your home, its value alone undoubtedly puts you over the qualifying asset limit in your state. Add in the value of your vehicles, bank and savings accounts, life insurance policies and whatever other assets you have accumulated, and you can see that you’re in a catch-22 situation. You own too much to qualify for Medicaid, but not enough to pay for long-term health care.

Medicaid Planning

This is where Medicaid planning comes in. It is perfectly legal for you to “spend down” your assets so as to qualify for Medicaid. However, you need expert estate planning legal help to make sure that your methods and documents can pass your state’s Medicaid eligibility regulations. A minor error in your documents can result in denial of your Medicaid application.

You will be glad to know that AmeriEstate Legal Plan, Inc. not only has a network of estate planning lawyers knowledgeable in each state’s Medicaid laws, but also includes elder care law services in its suite of estate planning services.

Look-Back Period

When you apply for Medicaid long-term care benefits, your state has a specific look-back period. This is five years in all states except California, where it’s 30 months.

Specifically, Medicaid personnel review all of your financial dealings during this period. If they find anything that smacks of deliberate impoverishment or other fraud, they will deny your Medicaid application.

Consequently, you need to begin and implement your Medicaid spend-down as soon as possible so that everything will be legal and in place well before your anticipated Medicaid application date.

Estate Recovery Program

The other thing you need to be aware of is that your state is required by law to attempt to recover the benefits it pays on your behalf. Called the Medicaid Estate Recovery Program, this program kicks in after your death.

Basically, your state files a claim against your probate estate for reimbursement of the amount it paid for you. In some states, it can even file a lien against your home if you did not protect it via the proper Medicaid planning.

Getting Started

Long-term health care is something virtually everyone will face in their elder years. Unfortunately, most people cannot afford its exceedingly high costs and therefore must apply for Medicaid. However, Medicaid eligibility rules are exceedingly stringent. Learn how AmeriEstate Legal Plan, Inc. can help you plan for the inevitable so that your estate will not be wiped out by medical costs. Contact AmeriEstate Legal Plan, Inc. today to begin your Medicaid planning.