In a previous blog, we discussed the basics of what Medicaid is and some of the challenges older people face when trying to get covered. Despite millions of Americans relying on Medicaid for medical assistance, the process of getting covered and receiving care can be complicated to the point of being impenetrable. Practically no one is fully prepared to navigate the Medicaid application process on their own. This is why Medicaid Planning is so valuable!
What Is Medicaid Planning?
Simply put, Medicaid Planners help clients structure their financial resources and prepare documentation to ensure the best possibility of being accepted into the Medicaid program. This includes creating trusts, managing asset transfers, and converting countable assets into exempt assets.1 They can also manage finances to ensure that a healthy spouse of an applicant has adequate income and resources to live comfortably and independently during and after the time when their partner is receiving care assistance. Ultimately, the goal is to manage one’s assets in a way that they can qualify for Medicaid’s long-term care benefits while simultaneously preserving the value of these assets.
The benefits of Medicaid Planning are obvious: the application process is complex and long-term care is extremely expensive. As such, whether you just want to improve your own chances of being accepted or you want to guarantee your loved ones have access to the care they need, it pays to take steps that better ensure the possibility of acceptance into the Medicaid program.2 Also, while not everyone is the age bracket where Medicaid is a top concern, advance preparation is key for security long term. If you don’t stay ahead of the curb, a sudden illness or accident can leave you paying out-of-pocket for nursing or other long-term care costs.3
Medicaid has more than 60 distinct eligibility categories, some mandatory and others optional.4 This can be complicated, and time-consuming, and even the simplest of errors can result in the denial of benefits.5 Need for Medicaid is determined on a case-by-case basis, using criteria that initially divide recipients into three categories:6 7
- Mandatory Categorically Needy: Federal law requires that states cover all persons in this category. Includes recipients of Aid to Families with Dependent Children (AFDC) and most aged, blind, and disabled persons receiving assistance through the Supplemental Security Income (SSI) program.
- Optional Categorically Needy: States are permitted to extend Medicaid coverage to needy individuals from a number of other specific groups. If done so, it must provide the same level of benefit as the “Mandatory Categorically Needy.”
- Medically Needy: Individuals whose income, while too high to qualify them as categorically needy, is reduced by large medical expenses that their available income effectively equals the income of categorically needy individuals.
Beyond this, eligibility for Medicaid nursing-home benefits requires that the applicant demonstrates categorical eligibility by showing that he or she is:8
- Aged 65 or older.
- A U.S. citizen, a lawfully admitted “alien”, or an “alien” permanently residing in the U.S. under color of law.
- A resident of the state where the Medicaid application is filed.
- Confined continuously to a medical institution for 30 days prior to attaining Medicaid eligibility.
- Financially eligible (Generally: The applicant’s income cannot exceed 300% of the current SSI benefit amount).
Along with more general requirements, every state has its own unique eligibility rules. For instance, Indiana has four major categories that qualify for Medicaid pregnant women, children, adults, and aged/blind/disabled. The first two typically fall under the Hoosier Healthwise program, while non-disabled adults are usually served through the Healthy Indiana Plan. Meanwhile, the aged and disabled are served through either traditional Medicaid or Hoosier Care Connect.9 All of these group members’ eligibility is impacted by factors such as age, income, family size, and existing coverage. This differs from Illinois and Michigan, which have their own eligibility requirements and assistance programs, so always look into what is available in your state.
Coming In Prepared
It is highly recommended that if Medicaid is on your mind, you should seek out legal assistance. While self-planning is possible, having a Medicaid Planning professional at your side will ensure efficiency, speed, and accuracy during the entire process, helping you meet the many factors that go into that process. Finally, rest assured that once you have a secure plan in place, the application process will go by smoothly and effectively.
However, this isn’t the end of our discussion of Medicaid Planning. In a future blog, we’ll look back on the planning process and look at the legal and ethical considerations that go into Medicaid Planning. Until then, if you need help with Medicaid or any other health-related legal considerations, be sure to contact the pros at CCSK Law.
1. PayingforSeniorCare.com. (2020, October 14). Medicaid Planning: Pros & Cons, Costs and Strategies. Paying for Senior Care. https://www.payingforseniorcare.com/find_medicaid_planning_help.
2. American Council on Aging. (2021, February 12). Medicaid Planning: Definition, Costs & Types of Planners. Medicaid Planning Assistance. https://www.medicaidplanningassistance.org/medicaid-planning/.
3. American Council on Aging.
4. Commonwealth Fund. (2018, June 12). Medicaid and the Role of the Courts. Commonwealth Fund. https://www.commonwealthfund.org/publications/fund-reports/2018/jun/medicaid-and-role-courts.
5. American Council on Aging
6. Takacs, T., & McGuffey, D. L. (2002) Medicaid Planning: Can It Be Justified? Legal and Ethical Implications of Medicaid Planning. William Mitchell Law Review, 29(1). https://open.mitchellhamline.edu/cgi/viewcontent.cgi?article=1598&context=wmlr
7. Regan, S.P. (1995). Medicaid Estate Planning: Congress’ Ersatz Solution for Long-Term Health Care. Catholic University Law Review, 44(4). https://scholarship.law.edu/cgi/viewcontent.cgi?article=1612&context=lawreview
8. Takacs, T., & McGuffey, D. L.
9. Indiana Government. (n.d.). Eligibility Guide. Indiana Medicaid. https://www.in.gov/medicaid/members/apply-for-medicaid/eligibility-guide/.
About the author
Christopher Ripley is a Valparaiso native and a lifelong Indiana resident. He is the oldest of five children. After graduating from Valparaiso High School, Chris attended Purdue University where he received his B.S. in Mathematics. He then attended law school at Indiana University in Bloomington where he received his Juris Doctorate. Chris has practiced law since 2013 and has served clients across the State of Indiana from Porter County to Evansville in a variety of legal matters. Chris is licensed to practice law in Indiana and Illinois.