How a Medicaid Planning Service Can Save You Money
According to the U.S. Department of Health and Human Services, the average American turning 65 today will incur about $138,000 in future long-term care costs. Facing these high costs, many seniors rely on financial assistance programs such as Medicare and Medicaid to help them afford their senior care.
However, qualifying for assistance and accessing these benefits is not always straightforward. Most seniors qualify for Medicare, but the program’s coverage of long-term care is limited. Medicaid provides coverage for long-term services such as nursing homes, but many seniors do not qualify for the program.
The high cost of care combined with Medicare’s coverage limitations leaves some seniors in need of Medicaid, but unsure if they are eligible or the current eligibility standards. This is where Medicaid planning services can be of great use. Medicaid planning services help individuals understand Medicaid eligibility and determine if they are eligible, provide assistance with Medicaid application preparation, and more.
In this guide, we’ll provide some more detailed information on what Medicaid planning is and what a Medicaid planner does, the benefits and downsides of working with a Medicaid planning service, and who can benefit from working with a Medicaid planner.
What is Medicaid Planning?
Millions of seniors use Medicaid to help pay for their long-term care. But the program’s eligibility requirements and application process can be quite complex, and the terms change often. When learning about the program and determining if one is eligible, some people turn to a Medicaid planning service for assistance.
“Medicaid planning” is a broad term that encompasses many services involved with helping someone access Medicaid benefits. Depending on the person’s needs, a Medicaid planner can do as little as checking the client’s Medicaid application before submission to confirm that it’s complete, or as much as a complete restructuring of someone’s assets to help make them Medicaid-eligible.
Because the field is so broad, various senior care experts can act as a Medicaid planner, including elder law attorneys, eldercare financial planners, and geriatric care managers. Some professionals also earn the Certified Medicaid Planner (CMP) designation. The type of professional you choose to work with should be influenced by what assistance you need. For example, if you plan to restructure your finances, a financial planner or CMP will likely be the best choice. If you want to learn more about Medicaid benefits and coverage so that you get the most value out of your insurance, a geriatric care manager may be the right fit.
What Does a Medicaid Planner Do?
Medicaid planning can involve a variety of services related to Medicaid eligibility and application. Depending on the client’s needs, a Medicaid planner may perform one or more of the following functions:
- Explain Medicaid eligibility and the application process in the client’s state to help clients determine if they should pursue working with a Medicaid planner
- Gather necessary documents for a client such as a client’s birth certificate, income reports like paycheck stubs, and/or proof of resources like a bank statement
- Check a client’s application to ensure they have all of the necessary information and documentation before submission
- Advise clients on how to structure their assets for the best chance of future eligibility
- Help clients meet the financial eligibility requirements with minimal penalties
- Protect clients’ assets like a family home from Medicaid estate recovery
No matter which specific Medicaid planning services one needs, a Medicaid planner’s overall goal is to give clients the best chance to qualify for coverage. And by helping seniors get approved for Medicaid coverage and benefits, Medicaid planners can save seniors a significant amount of money on healthcare-related expenses.
What Are the Benefits and Downsides of Working with a Medicaid Planning Service?
Medicaid planners are beneficial for many people, and working with one can be particularly helpful for people who otherwise wouldn’t be eligible for Medicaid or know how to apply. But, there are sometimes downsides. Below, we explain both the potential pros and cons of working with a Medicaid planning service.
Benefits of Working with a Medicaid Planner
Not all people have the same goals when working with a Medicaid planner, so the benefits vary. But, generally speaking, a Medicaid planner can help you:
- Simplify the Application Process: A Medicaid planner can do the heavy-lifting of determining what documentation you need for your application, gathering necessary documents, and checking your application prior to submission.
- Gain a Better Understanding of Medicaid: Medicaid planners are experts in the program and can help explain any eligibility requirements or coverage terms that their clients are unsure about.
- Avoid Wasting Time: Medicaid planners can save their clients time in several different ways, including talking them through complicated topics, locating necessary documentation, and researching a client’s options. Additionally, for someone unsure whether they qualify, a Medicaid planner can provide them with an answer so that they don’t bother starting an application.
- Save Money: These planners help seniors access Medicaid, which can save them a significant amount of money on senior care expenses like nursing home care. But they notably can also help clients understand what not to do so that they avoid critical mistakes that could disqualify them from Medicaid or lead to penalties.
- Prevent Surprise Penalties: As referenced above, Medicaid planners can help their clients become eligible for Medicaid while incurring as few penalties as possible. There will almost always be some form of penalty from Medicaid if someone restructured their assets to meet income requirements. Still, a Medicaid planner can help you understand how to spend your money so that you face minimal penalties for “spending down.”
Downsides of Working with a Medicaid Planner
Medicaid planners strive to help their clients as much as possible, but their services do come at a cost. The price of Medicaid planning services can vary significantly between different planners. Costs will also depend on the type of Medicaid planner you choose to work with and how much assistance you need. For instance, an elder law attorney may charge several thousand dollars for their Medicaid planning services, while seeking Medicaid advice from a public case manager would be free. Be sure to ask about a Medicaid planner’s fees before you agree to work together to avoid any surprise expenses.
When Should Someone Work with a Medicaid Planning Service?
Medicaid planners can be useful for anyone who is applying for Medicaid or who has been approved and still finds the program overwhelming. Below, we give some examples of situations where working with a Medicaid planning service can save you money, time, energy, or all of the above.
You’re applying for Medicaid for the first time or find Medicaid confusing.
Like all types of health insurance, Medicaid is confusing for many people. And Medicaid has the added layer of complexity for eligibility and income limits, variations between states, and benefit limits. Because understanding Medicaid is so tricky, some people may not know how to prove that they’re eligible or understand what medical services are covered. A Medicaid planner will be very knowledgeable about both the application process and Medicaid benefits, so they can help seniors make sure they’re accessing all of the benefits for which they’re eligible.
You’re not sure if you qualify for Medicaid.
Medicaid eligibility is complicated and can change over time. In some cases, seniors may not be sure whether or not they’re eligible. A Medicaid planner can help you evaluate your countable and uncountable assets to determine if you qualify for Medicaid. If working with a general eldercare expert like a geriatric care manager, they will be able to advise you on your alternative options for assistance even if you don’t qualify for Medicaid.
You’re on the cusp of being financially eligible for Medicaid.
It should be noted that spending a large amount of money in an attempt to qualify for Medicaid is an abuse of the system (and will be subjected to penalties). But in some cases, seniors may be eligible to “spend down,” which allows them to spend their money on qualifying expenses without facing a penalty. A Medicaid planner can help you identify which qualifying expenses you may be able to pay for in order to get your income down to meet Medicaid’s limit, and, crucially, ensure you avoid accidentally spending down on non-qualified expenses.
A Note on Medicaid Penalties
Unfortunately, some people use Medicaid planning in an attempt to take advantage of the Medicaid system. They try to restructure their assets to make it appear as though they have limited income. But Medicaid does not allow people with substantial financial resources to simply give away or transfer their money to a family member to qualify for Medicaid benefits erroneously. Doing so will lead to the person being blocked from Medicaid for a designated penalty period.
Penalty periods vary depending on the state and how much money one gave away, but can ultimately result in someone being ineligible for Medicaid for many years. In all cases, using Medicaid planning to misrepresent your finances is defrauding the system, and you should avoid working with any Medicaid planner who performs these kinds of transactions.
In some situations, individuals are allowed to “spend down” or spend a portion of their money to meet Medicaid’s income limits. The funds can only be spent on certain things, like medical bills and home safety modifications, and the exact rules vary in different states. But so long as you spend the money on qualifying expenses and within your state’s limits, you will not face a penalty period. If you do need to spend a portion of your assets to qualify for Medicaid, be sure to pay extra attention to your state’s rules. Any Medicaid planner should fully understand Medicaid’s penalties and your state’s look-back period to ensure you’re compliant.
You want to protect your assets from Medicaid estate recovery.
Medicaid has a policy of recouping the cost of a beneficiary’s long-term care after the beneficiary passes, referred to as Medicaid estate recovery. That is, the state may seize one’s remaining assets after they pass away if Medicaid paid for that person’s long-term care. In many cases, the person’s remaining asset is a home. There are ways to protect your assets from Medicaid estate recoveries, such as setting up a trust or life estate, but these transactions should always be done with a Medicaid and financial expert’s assistance.
Additional Medicaid Resources
These resources can educate seniors about Medicaid in general and Medicaid planning. Reviewing the guides and articles below can help seniors determine if they should work with a Medicaid planner, and if so, how much and what types of assistance they need.
|10 Things to Know about Medicaid: Setting the Facts Straight||The Kaiser Family Foundation published this list of ten key things every consumer should know about Medicaid. This article is a great place to start for individuals who are new to Medicaid and are just starting their research.|
|State Medicaid Guides||This section of the official Medicaid website makes it very easy to find each state’s individual Medicaid eligibility requirements, the documents needed to apply, and more. Individuals hoping to enroll in Medicaid can visit this page to get an idea of what’s ahead.|
|Twenty Questions about Planning for Medicaid and Nursing Home Care||This article answers common questions about Medicaid that specifically pertain to seniors. It details determining Medicaid eligibility and how Medicaid relates to long-term care and nursing home care.|
|Medicaid and Long-Term Care for the Elderly||This guide provides an overview of the Medicaid program, eligibility requirements, the application process, and benefits. It can be very useful for seniors who are just beginning to learn about Medicaid as an option for them.|
|What Consumers Need to Know About Medicaid||The AARP Public Policy Institute published this article to help seniors better understand Medicaid and its intricacies. Topics include the program’s history, eligibility and benefits, and the role Medicaid plays in long-term care.|
Frequently Asked Questions
What Is Medicaid in the U.S.?
Medicaid in the U.S. is a health coverage assistance program for low-income individuals or people with certain qualifying health conditions. It is a joint federal and state program designed to provide health care coverage and access for those who would otherwise not be able to afford health care.
What Is the Difference Between Medicare and Medicaid?
The main difference between Medicare and Medicaid is the people they serve. Medicare is a medical insurance program primarily for people over the age of 65, dialysis patients, and younger people with certain disabilities. Medicaid is a health care assistance program for low-income individuals. Some people, such as seniors with a low income, are eligible for and can be enrolled in both Medicare and Medicaid.
What Is a Certified Medicaid Planner?
A Medicaid planner is someone who advises individuals on their Medicaid eligibility and application. A Medicaid planner may help seniors understand their eligibility and prepare and complete their application. In some cases, they can help seniors arrange their assets to make them more likely to qualify for Medicaid. To have the designation of a Certified Medicaid Planner, the Medicaid planner must meet minimum educational and experience requirements and pass the certification exam.
Who Is Medicaid Eligible?
One is considered Medicaid eligible if they meet the financial and residency requirements for their state’s program, or are part of a mandatory eligibility group. Mandatory eligibility groups are groups of people who automatically qualify for Medicaid, such as people receiving Supplemental Security Income (SSI) and qualified pregnant women. There is no minimum or maximum age for Medicaid eligibility.
What Can You Own and Still Qualify for Medicaid?
What you can own and still qualify for Medicaid can vary depending on your state. Because Medicaid is a joint federal and state program, different states may have different income and asset limits. In general, you’ll need to be considered low-income and have few assets to qualify for Medicaid.