The Three Forms of Medicaid Planning

Medicaid is a social security program funded by the federal government but managed by the state. In Colorado, the agency that manages Medicaid is the Colorado Department of Health.

To qualify for Medicaid, one must fulfill certain financial as well as non-financial criteria. If you do not fulfill the non-financial requirements, little can be done. Financial requirements, however, are different. With the right amount of planning, no matter your financial circumstances, people of situations and backgrounds may be able to qualify for Medicaid assistance. However, depending on your circumstances, the type of Medicaid planning you will need to utilize may vary.

Below we have outlined the three main forms of Medicaid planning. Please keep in mind that this blog is not intended as legal advice for your specific situation. Please contact a knowledgeable Medicaid and Elder Law attorney like Carolyn Moller Duncan who can advise you on the best course of action regarding your unique circumstances.

1) No planning

The first form of Medicaid planning is actually no planning at all. Those who have little to no assets or income whatsoever do not really have to do anything to plan ahead for Medicaid eligibility. That’s because it is this demographic of people for whom Medicaid was originally established and intended. Medicaid is geared towards those that simply cannot afford to pay for their long-term care needs themselves.

This type of individual is not worried about protecting assets to pass on to their children since they already have very little to pass on. Nor do they fall into group of people that tend to fall through the Medicaid cracks without proper planning—those who have a moderate amount of income and assets that prevent them from qualifying for Medicaid, but who do not have enough wealth to afford their long-term care needs without draining themselves to the point of bankruptcy.

If you fall into this first category, your application and qualification for Medicaid should not be too difficult as long as your paperwork is properly executed.

2) Crisis planning

Falling on the opposite end of the planning spectrum from our previous category, crisis planning occurs when someone who is in a nursing facility or is faced with the prospect of entering a nursing facility has done nothing to plan for their long-term care needs, and they will be required to begin private pay within a month.

The fact is, bad things happen to good people. You may be perfectly healthy one day, with no anticipation of an upcoming need for long-term care, and the next you may be in dire need of expensive care. Most folks faced with this situation will eventually qualify for Medicaid assistance, but only after they have been forced to pay for the cost of care out of their own pocket for a significant period of time. Crisis planning is when there is an immediate, pressing need to qualify for Medicaid with little or no planning having occurred prior to the need.

At this point, your best option is to develop a plan to get qualified as quickly and efficiently as possible, but the road ahead will likely be a rocky one.

3) Practical planning

Practical planning is the process of planning far ahead for your potential future long-term care needs so that you are able to protect and preserve income and assets for your spouse and loved one should you ever have need of long-term care and Medicaid qualification in the future. As we just mentioned with regard to crisis planning, long-term care needs can arise completely unexpectedly in just about anyone. As you age, everyone should prepare themselves for the practical inevitability of developing expensive health needs. In order to qualify for Medicaid and still preserve much of your assets, you will likely need to plan at least five years in advance of your need to qualify.

The practical planning process requires a significant amount of patience and foresight, but by creatively utilizing trusts and other vehicles, even those with significant assets can plan and prepare to qualify for Medicaid while still preserving much of their wealth for their loved ones—potentially saving you and your loved ones tens of thousands of dollars in future elder care costs.  

Practical planning is much more desirable and beneficial than crisis planning, since you will already be prepared to qualify for Medicaid if long-term care needs arise, rather than having to scramble to qualify for Medicaid at the last minute AFTER the need arises.

Whether you have no need to plan ahead, are in need of crisis planning, or you are ready to begin the process of protecting your assets through practical planning, Carolyn Moller Duncan, P.C. can guide you and advocate for you with all of your Medicaid planning and qualification needs. Give us a call today to learn more.


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