Medicaid planning is one of the most important things that people do with the hope to protect assets and ensure that they achieve the best care they need as they grow older. Unfortunately, there are several misconceptions concerning Medicaid planning during the planning process, which in turn becomes very costly. It is necessary to avoid mistakes when considering Medicaid planning, since rules do change frequently and the planning options have become so fact-specific in nature.
The most common planning mistakes that people usually do during Medicaid planning are outlined below. First, many people take too long to begin the planning process. It is important to take note that planning for Medicaid should be done long before an individual needs to cover the nursing home costs ( Law & Rights, 2018) . Waiting too long could subject individuals to exhaust a better portion of financial assets, which can result in a delay or denied coverage.
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Giving away assets is a mistake associated with Medicaid planning ( Schuster, 2017) . The program has a five year period necessary for an individual to check for sale or transfer any assets before the application. If such activities are detected, the period that an individual has to wait for Medicaid coverage will be equal to the assets divided by the average costs of monthly nursing home care ( Adams, Galactionova, & Kenney, 2015) . Therefore, it is important to plan early for the Medicaid program to avoid stress.
The other common mistake is failing to contact an attorney who assists in planning strategically for the future Medicare needs ( Miller, 2015; Miller, & Roepke, 2016) . Failing to create a Medicaid plan is one of the major mistakes that people can make since it is the only source of payment for a nursing home. Proper Medicaid planning involves transferring the assets into a trust but not just any type.
When planning for Medicaid, individuals should understand that an asset is a revocable living trust that is available to pay for the care costs which should be included in calculations of the resources unless an exception applies. Therefore, any form of Trust created for Medicaid planning should be irrevocable. Assets in a special needs trust are deemed unavailable to the beneficiary; hence do not impair the eligibility for Medicaid, which is a complicated area of planning as rules constantly change.
References
Adams, E. K., Galactionova, K., & Kenney, G. M. (2015). Medicaid family planning waivers in 3 States: did they reduce unwanted births?. INQUIRY: The Journal of Health Care Organization, Provision, and Financing , 52 , 0046958015588915.
Law, E., & Rights, D. (2018). Elder Bankruptcy. Michigan Bar Journal . Retrieved from https://mielderlaw.com/wp-content/uploads/2018/02/Elder-Bankruptcy.pdf.
Miller, J. A. (2015). Medicaid Spend Down, Estate Recovery and Divorce: Doctrine, Planning, and Policy. Elder LJ , 23 , 41.
Miller, J. A., & Roepke, A. O. (2016). Medicaid Planning in Idaho. Idaho L. Rev. , 52 , 507. Retrieved from https://heinonline.org/HOL/LandingPage?handle=hein.journals/idlr52&div=19&id=&page=.
Schuster, J. (2017). Primer on Medicaid Asset Protection. Newsletter of the State Bar of Michigan Solo and Small Firm Section , 41 (1). Retrieved from http://www.thewriteattorney.com/wp-content/uploads/2016/11/Jan2016.pdf.
