What Is Medicaid Planning? How to Get Help Qualifying

Why You Should Plan for Medicaid

It’s important to plan for Medicaid, should you need long-term care. To ensure that you can get the care you need, you must make sure you’re eligible for Medicaid. You should also be aware of the application and review process — all the better to preserve your family’s assets.

High Costs for Long-Term Care

According to the U.S. Department of Health and Human Services (HHS), 65 percent of U.S. adults ages 65 and older are projected to need long-term support services (LTSS) in the next few years. LTSS are expensive. Plus, the average American who turns 65 in 2024 will have $120,900 in future LTSS costs, more than a third of which they’ll have to pay for out of pocket. Unfortunately, Medicare does not cover long-term care, nor does Medigap or most health insurance policies. One of your only options, aside from private long-term care insurance, is Medicaid.

While the exact benefits vary by state, there are mandatory benefits included in all Medicaid policies, according to the Centers for Medicare & Medicaid Services. These mandatory benefits include home health services — meaning you can age in place in your home. Optional benefits include private-duty nursing services, health homes for people with chronic conditions, and home- and community-based services.

Complications of Medicaid Eligibility

Medicaid eligibility is much more complicated than other programs like Medicare. This is because Medicaid is administered by states and funded by both states and the federal government. Medicare, on the other hand, is federally administered and funded — making for a much simpler enrollment process.

This means that eligibility will be different based on what state you live in. For example, in Pennsylvania, adults must have modified adjusted gross incomes (MAGI) that are 133 percent or less than the federal poverty level (FPL). For a household of one, they must have an income equal to or less than $20,029.80 per year. In New York, in contrast, the threshold for adults is 200 percent or less of the FPL. Even if you are eligible in your state, the application and review process could mean that you don’t get your benefits.

Application and Review Process

The application and review process, just like eligibility, will differ by state. In the Commonwealth of Pennsylvania, for example, it takes about four to six weeks to process an application. During this time, you may not have health insurance.

Working with a Medicaid planner could accelerate this process, potentially. I’ll go into more detail about the types of Medicaid planners you can work with. To summarize, though, Medicaid planning will help you with your Medicaid application — from collecting documents to restructuring your financial assets, to maximizing Medicaid coverage. Using a Medicaid planner may be the difference between having funded long-term care insurance and paying out of pocket.

Preserve Your Family’s Assets

The Medicaid Estate Recovery Program (MERP) means that states can seek recovery of payments from someone’s estate for their nursing-, home-, and community-based long-term care, along with hospital and drug costs. This means that if a Medicaid enrollee passes away, under certain conditions the state can recover their money. However, this isn't the case if the deceased enrollee has a surviving spouse, a child under the age 21, or a disabled child. It also won’t apply if recovery would cause an “undue hardship.”

So, let’s say you — a single, childless person — use Medicaid to pay for your nursing home. If you have any money when your life ends, the state can get reimbursed for its Medicaid benefits from your estate.

That’s where Medicaid planners come in. They recommend legal ways to protect your assets even after you’ve passed — including your home, often the biggest valued asset. A Medicaid planner can help you turn your countable assets into noncountable assets, protecting your home from the MERP. That’s just one way that a Medicaid planner can protect your assets after your death.

Types of Medicaid Planning Professionals

Various professionals and volunteers can help with Medicaid planning, each with its own drawbacks and benefits.

• Certified Medicaid Planners (CMPs): CMPs can help figure out if you qualify for Medicaid. They can also tell you how to qualify even if you’re above the asset or income limits. They’re not as expensive as lawyers, but you will have to pay them out of pocket. However, compared to a geriatric care manager (GCM), CMPs have less knowledge about care needs and more knowledge about Medicaid itself.
• Commission-Based Medicaid Planners: If your assets make you ineligible for Medicaid, you may want to consider a commission-based Medicaid planner. Their big advantage over CMPs is that their services are free, paid for by a commission from Medicaid-compliant annuities. They are very knowledgeable about Medicaid eligibility but aren’t knowledgeable about Medicaid alternatives — unlike geriatric care managers. This means that they’re incentivized to push you toward Medicaid and will not be able to advise you on alternatives.
• Elder Law Attorneys: Elder law attorneys can make trusts on behalf of clients in order to restructure their assets or income — making them Medicaid-eligible. While they can be effective, this is the most expensive option for Medicaid planning, with costs ranging from $3,000 to $150,000 in total.
• Geriatric Care Managers (GCMs): GCMs can plan for care management, but only about a quarter can help with financial planning. Plus, they can’t help with legal work, as most come from social work or nursing backgrounds. The main advantage of hiring a GCM is that they are very knowledgeable about local programs that could provide alternatives to Medicaid. However, while they’re not as expensive as attorneys, you’ll still have to pay money out of pocket.
• Long-Term Care (LTC) Ombudsmen: The federal government’s LTC Ombudsman Program exists to resolve complaints of people living in board and care homes, assisted living homes, and nursing homes. Aside from resolving these issues, they can also discuss financial topics, and their services are free. However, if your income or assets make you Medicaid ineligible, they can’t help you qualify. So, it's a better option for those who already qualify and want to fund their LTC with Medicaid rather than paying out of pocket.
• Public Benefits Counselors: Public benefits counselors work for either Medicaid offices or state agencies like the Aging and Disability Resource Center. They, also known as case managers, understand both Medicaid eligibility and alternatives — and their services are free. However, you get what you pay for. You may not receive the same quality of service as you would with a lawyer or CMP. Like the LTC ombudsman, public benefit counselors are a good option if you already qualify for Medicaid. However, they can’t help you qualify if your assets or income are too high.
• State Health Insurance Programs (SHIPs) Counselors: Lastly, SHIPs counselors are typically volunteers who have been trained about the state’s Medicaid program. They are best for people whose incomes or assets are under the eligibility thresholds. For free, they can explain eligibility criteria and how to apply.

Why You Should Not Do It Alone

Whatever you do, it’s best not to plan for Medicaid alone. You don’t want to risk not having enough money for long-term care or, worse, being ineligible when you didn’t have to be. In a worst-case scenario, paying for LTC out of pocket could jeopardize your family’s assets for years to come.

Medicaid is complicated, so it’s best to seek professional help. Fortunately, the American Council on Aging can help you find a Medicaid planner. Simply fill out the link form to find options in your area. Does Medicaid cover assisted living? Can Medicaid pay for nursing homes? These are questions you can find answers to with the help of a Medicaid planner.