Medicaid Planning

Spending down covers the strategy that an elderly person will take to 1) protect his or her assets, and in the process 2) qualify for Medicaid eligibility. Of course, the earlier an applicant develops this strategy, the more options he or she has available. This is because under the five year Medicaid look-back rule, MassHealth will deny benefits for a penalty period if an applicant transfers assets to anyone other than a spouse, in the 5 years leading up to the Medicaid application. And with $9000-$10000 at stake for each month of a Mass Health penalty, the risk of not planning is pretty significant. So a potential Mass Health long term care applicant should know, as early as possible, what he needs to do in order to secure Medicaid eligibility.

The chart above represents the general asset threshold formula for Medicaid long term care as of 2011. While these asset levels appear small, and they are, part of the service that a Medicaid attorney provides is to help a potential applicant convert his or her “countable” assets into “uncountable” ones. Examples of such conversions include pre-paying for certain qualifying services, or perhaps changing a large sum of money into a stream of income, e.g. to an annuity.

Understanding how to properly execute such strategies, however, takes both experience and legal expertise. While we do help clients that may come to us for help in trying to overcome a denial of long term Mass Health benefits, certain cases are irreversible. Such clients may have attempted to complete the application on their own, or may have received some advice from a nursing home’s business office staff. Understand that such staff may try to help, but they are not hired for their expertise in Medicaid, are not equipped to help convert assets if necessary, and do not generally represent Mass Health applicants in appeals if benefits are denied. Given that 1) a simple mistake resulting in even a month of lost benefits can cost near $10,000, and 2) legal fees are a part of the overall spend down strategy for Mass Health long term care, consulting a Medicaid attorney is encouraged as soon as possible and before starting the application for long term care. This makes the process safer and easier for everyone – for the Mass Health applicant, for the applicant’s family, for the nursing home, and for us! At the very least, check with someone experienced in Medicaid applications before any assets are gifted, transferred or converted.