What is Medicaid Crisis Planning?

Mar 8, 2022Elder Law

MEDICAID CRISIS PLANNING

Let’s say your aunt has fallen and broken her hip. She is transferred to a skilled nursing facility for care. During treatment, your aunt discovers that she does not have the power to return back home and decides to stay at the facility for long term care. There was no plan in advance to pay the cost of a family member to enter long term nursing home care.

In the video below, Medicaid attorney Jeffrey Williamson explains what Medicaid Crisis Planning is, and what to do when you find yourself in need of it. As we get older, the probability of needing assistance with medical bills increases every year.

 

There are any number of reasons why you may not have prepared ahead of time for this circumstance. However, when the need arises, it is important to find an experienced attorney who can help you outline a solid plan to retain as much of your financial resources as possible. When faced with such a crisis, you will have questions. Here, we answer some of the most common questions relating to protecting your assets while finding ways to cover the cost of your medical expenses. 

SO, HOW DO YOU PAY FOR CARE?

You will be eligible to have your aunt’s long term care costs paid for by Medicaid when she, “the applicant”,  has assets and income that meet certain state-mandated levels. But, some people have too much income to qualify for medicaid. If this is the case, what do you do? 

SPEND DOWN

Some individuals have too much income to qualify for Medicaid. A person who has more medical bills than money may qualify for Medicaid if they use their excess money to pay medical bills. This process is called a Spend Down. It works like a deductible for car insurance. Medicaid will pay for the medical bills over the amount of money used to pay those bills.

HOW DO WE SPEND THE EXCESS INCOME?

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It is necessary to spend your extra income so that you can begin the medicaid process and meet medicaid eligibility to ultimately pay your bills. Your team at J.L. Williamson Law Group recommends the following ways to Spend Down: 

  • Make necessary home repairs
  • Pay off existing debt
  • Pay for needed services
  • Prepay funeral expenses for up to $10,000 per person
    • Find the nicest accommodations for your loved ones
  • Purchase a new car
    • This is a good option because the value of the car depreciates once purchased

WHAT IF I CAN’T SPEND DOWN?

The “gift and loan strategy” gives you the income to pay and provides an opportunity for some protection of assets. The gift and loan strategy can be a great option for those applying for Medicaid. As well as protecting a portion of the applicant’s assets, it secures an income stream to pay the nursing home and utilizes vehicles sanctioned by DRA. 

The use of promissory loans can ensure that you’re eligible to qualify for Medicaid with effective long term care planning. Medicaid requires that the purchase of a promissory loan is an uncompensated transfer of assets unless the note meets specific criteria. The loans have to be non-assignable, non-transferable, and noncancellable. 

Loan criteria is specified in GA Medicaid Manual $2,313 U.S.C. $1396p. Once your income is “spent down” to the medically needy income limit, you qualify for Medicaid for the remainder of the month.

Crisis planning is necessary to prevent your family from getting into a time crunch or financial bind when a sudden illness or injury demands immediate long term care placement. It is best to prepare for Medicaid before an emergency occurs to preserve your family’s time and finances. You can do this by properly understanding the full scope of laws in medicaid eligibility. 

The legal team at J.L. Williamson Law Group is determined to guide you and your loved ones in this process to save the financial legacy you have worked so hard to build. 

Contact us before you or your loved ones need to move into an assisted living facility.