Isn't Medicaid For Poor People?

By Evan H. Farr, Certified Elder Law Attorney

The Law Firm of Evan H. Farr, PC

. http://www.farrlawfirm.com/

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Isn't Medicaid For Poor People?

Q. My neighbor, who lives in a half a million dollar home, has a wife who just qualified for Medicaid. There is no way they can be poor enough to qualify. Can you explain? And if they do qualify for a government program meant for poor people, how is it ethical?

A. Medicaid was designed for the poor during Lyndon Johnson's War on Poverty and still serves as a program for millions of low-income Americans. It also benefits many middle to upper class seniors, primarily by covering the catastrophic costs of nursing-homes so families like your neighbors don't have to deplete the assets it took a lifetime for them to earn.

Nursing homes in Northern Virginia cost $10,000 to $12,000 a month. Many people mistakenly assume that Medicare will cover long-term care, but Medicare does not ever cover long-term care. At most, Medicare covers 100 days of short-term rehabilitation that may take place in a skilled nursing facility.

With baby boomers and their parents living longer than ever, few families can count on their own money to go the distance.

Stagnant incomes, declining savings, and rising debts make the costs of long-term care an increasing threat to the security of current and future middle-class families.

Currently, Medicaid is the primary payer for more than a million nursing home residents. And these aren't the indigent; many of them are the result of middle-income people who have already run through their own money paying for their nursing home costs, and then become eligible for Medicaid.

Why wait for that to happen? Life Care Planning and Medicaid Asset Protection is the process of protecting assets from having to be spent down in connection with entry into a nursing home, while also helping ensure that you or your loved one get the best possible care and maintain the highest possible quality of life, whether at home, in an assisted living facility, or in a nursing home.

Life Care Planning and Medicaid Asset Protection can be started any time after a person enters the “long-term care continuum,” meaning that a person is starting to need assistance with activities of daily living (eating, dressing, bathing, toileting, transferring, and walking) or instrumental activities of daily living (such as cooking, cleaning, caring for pets, paying bills and managing finances).

Congress accepts the realities of Medicaid Planning. To plan ahead and accelerate qualification for Medicaid is no different than planning to maximize your income tax deductions to minimize your income taxes, taking advantage of tax-free municipal bonds, or planning your estate to avoid

estate taxes.

You asked if Medicaid Planning is ethical. As a member of NAELA and a Certified Elder Law Attorney, you may rest assured that everything that we do is absolutely, unquestionably, 100 percent legal and ethical.

To qualify for Medicaid, applicants must have minimal assets–no more than $2,000 in cash and cash equivalents such as bonds and IRAs.

For married couples, the spouse staying at home may have assets worth an additional $117,000, the annually adjusted Social Security cap for 2014.

Does this mean that if you need Medicaid assistance, you'll have to spend nearly all of your assets to qualify?

No; there are dozens of Medicaid asset protection strategies that can be employed. You should call a certified Elder Law attorney to explore strategies for your specific situation.