As mentioned in our previous blogs on the topic, Medicaid planning can be a valuable investment for those looking to ensure that they or a loved one qualify for their Medicaid program. After all, the application process is complex, with even a minor misunderstanding potentially leading to a rejection. Having an expert legal and financial council on board can increase your likelihood of being accepted and better secure your loved one’s long-term wellbeing.
Despite its clear benefits though, some have called the practice of Medicaid planning into question, arguing that it is unethical, if not actually legal. Obviously, we at CCSK Law support Medicaid planning and believe in it as a way to navigate a complicated legal environment. However, we believe it’s important to acknowledge the arguments both for and against so that clients can make a fully informed decision as to whether they want to go forward with the planning process.
The Legality of Medicaid Planning
First and foremost, it is important to stress that Medicaid planning is 100% legal. While there are laws in certain states that limit who provides legal advice on Medicaid planning, there are no states with laws that would prohibit a family from helping a loved one qualify for their state’s Medicaid program. Though some question the practice (as we’ll discuss later), there are no legal issues on the matter and the clearest boundaries are set on planners and legal counsel, not the loved ones of a potential Medicaid applicant. As such, if you are interested in Medicaid planning and are simply concerned about the legality of the matter, you have nothing to worry about.
The Ethics of Medicaid Planning
Educators, scholars, lawyers, and politicians have expressed mixed opinions on the subject of ethics and Medicaid planning. To some, Medicaid planning is no different ethically from income tax planning or traditional estate planning: they all involve taking maximum advantage of the existing law (within legal, and therefore ethical, bounds). In this regard, planning ahead and accelerating qualification for Medicaid is no different than planning to maximize your income tax deductions to receive the largest income tax refund allowable, taking advantage of tax-free municipal bonds, or planning your estate to avoid paying estate taxes.
On top of this, some scholars have argued that Medicaid planning is a necessity for overcoming a discriminatory health insurance system. There is consistent evidence that the U.S. health insurance system discriminates against people dealing with certain types of chronic illnesses, particularly those that tend to require long-term care, such as Alzheimer’s disease, Parkinson’s disease, Huntington’s disease, Amyotrophic Lateral Sclerosis (ALS), and other degenerative conditions. When no one has a right to basic health care or long-term care, it is reasonable for people to take the necessary steps to ensure their needs are taken care of.
Still, for various reasons, there are critics of Medicaid planning. Some argue that Medicaid is strictly for “the poor” and that the people who rely on Medicaid planning aren’t part of the intended demographic. They tend to criticize Medicaid planning as people “voluntarily impoverishing” themselves to qualify for benefits, insisting that Medicaid’s strict eligibility criteria were put into place to ensure that only the truly needy could obtain benefits. They also tend to say that people should buy long-term care insurance, as it would lead to many of the same benefits without putting unnecessary financial pressure on taxpayers.
Additionally, some claim that children who engage in Medicaid planning for their parents are depriving them of good care, with certain critics even calling it a form of elder abuse. They claim that many elders in nursing homes lack the mental capacity to do Medicaid planning, leaving their children to make choices that favor saving money over guaranteeing good long-term care. Instead, they would use the system to acquire their parent’s assets while the elder winds up with substandard long-term care.
Medicaid Planning: The Right Choice For You?
Whether you’re an older person looking to secure your own long-term care or the child of an elder working to help them qualify for Medicaid, there are plenty of reasons to look into Medicaid planning. However, as we’ve covered, there are a number of ethical considerations to work out ahead of time. If approached in earnest and with good intentions, Medicaid planning is a valid strategy for navigating a dense network of regulations and stipulations. Of course, Medicaid planning can also be misused by the ill-informed or the ill-intentioned. This is why we always suggest that Medicaid planning be handled alongside a respectable legal professional: so long as they follow the Model Rules of Professional Conduct, you can be certain that they will guide clients towards their goals without falling into unethical behavior.
 American Council on Aging. (n.d.). Medicaid planning: Definition, costs & types of planners. Medicaid Planning Assistance. https://www.medicaidplanningassistance.org/medicaid-planning/.
 American Council on Aging.
 American Council on Aging.