Seniors and Medicaid Planning

Posted by Sheri Tucker, M.S., J.D.Jan 04, 20231 Comment

Often Adult Children of aging parents walk into my conference room concerned  about their parents' finances and health care expenses, long-term care needs, mental capacity, and a lack of financial resources. Adult children want solutions. Sometimes it's a concerned spouse who needs answers. Every family circumstance is different. Often, the solution involves Medicaid pre-planning or a crisis plan. Let's review Seniors and Medicaid planning in Elder law.

Medicaid Myths and Elder Law

Medicaid myths hinder estate planning in Elder law. One myth is that hard-working middle-class retirees do not qualify or will not need Medicaid. For the most part, employees do not have health insurance. Unfortunately, many do not plan for long-term care. Nursing Home Facilities and Memory Care Units increase in costs every year.  The average wage earner is not prepared for a financial cost ranging from $7000 to $10,000 a month. Medicaid will become necessary to help with the financial cost of care.

Another myth is that Medicaid replaces family care giving. Family care givers bear the financial responsibility for aging parent care.  At some point, the out-of-pocket expenses and emotional cost take a toll on a family. Medicaid offsets the financial expenses. For other Medicaid myths that hinder proper planning in Elder care law visit 

The Myth of Divorce for Medicaid

I've had couples enter my office concerned because other attorneys advocated divorce to qualify for medicaid. There is a difference between divorce and dividing assets. Imagine a married couple of 50 years being told to divorce. It is not necessary to destroy your family unit and peace of mind to qualify for Medicaid benefits. It's important to talk to the right attorney.

Medicaid is not Medicare

One confusion among seniors and families concerns the difference between Medicare and Medicaid. Medicare is a plan a Senior opts into at the age of 65 years old to avoid a penalty payment.  Medicare is a drug prescription plan deducted from Social Security and provides other plan options through private insurance. It is not a long-term care plan. Medicaid is MOHealthNet in Missouri. It provides government benefits for those who meet the criteria and need financial assistance for long-term care. Planning involves helping one to financially qualify for Medicaid.

Elder Law and Medicaid Planning

Medicaid planning for elder law care consists of a Medicaid Pre-plan or a Medicaid crisis plan. Pre-planning is a five-year estate plan that seeks to protect hard earned estate legacies such as a house and other finances. Most states require a pay-back for the use of government benefits. A state may recover from a senior's estate by filing a lien at probate against a house, or other monies. A pre-plan involves solutions such as a Medicaid Asset Protection Trusts (MAPT), personal care agreements, promissory notes, or even Medicaid-compliant annuities  to help protect assets against a time when Medicaid may become necessary.

A Medicaid crisis plan means that a person must qualify immediately for Medicaid because of an unexpected major health crisis such as a debilitating stroke or Alzheimer's. A five-year plan in place may turn into a crisis plan if a person falls ill before five years is completed. Crisis planning also helps a person whose long-term care insurance is running out and will no longer cover the cost of care. There are exempt and non-exempt assets. The individual, the health, and the finances will be reviewed and analyzed for the best solutions.

Several strategies or solutions exist to help a Senior qualify for Medicaid while preserving some of the legacy. It's important to remember that spending the money (spend-down) is not the only solution, or the best strategy.   Outright gifting of money leads to a penalty period. The aging parent needs to work with an attorney who analyzes a family's financial situation to provide the best available solutions.

Your Elder Law Attorney

Missouri does not recognize attorney specializations. To help Seniors and their families with long-term care concerns of running out of money for care, reach out to Your Estate Ally. We are a law firm with the necessary experience in elder law. We work with the Senior Living Institute to educate families about proactive planning. Call me at 314-998-4223 or 314.332.0011. Book your complimentary consultation today for planning and elder law issues Book time with Sheri Tucker.