Article 109-Estate Planning Series: The Cost of Medicaid for Long Term Care

Written by Wright Law on . Posted in Long Term Care

Although Medicare is not intended to provide assistance to seniors in need of long term care, under certain circumstances, Medicaid will provide that assistance.    I believe Medicaid is a critically important safety net to assist our most vulnerable senior citizens in need.  Therefore, it may seem ironic that the purpose of this column is to encourage you to avoid relying on Medicaid if possible.

Many government assistance programs are viewed as an entitlement, free to the recipient, at a cost to the rest of society.  In Idaho, this is not true for Medicaid benefits provided to seniors.   When those benefits are provided for a senior citizen to receive long term care, there is a financial cost to the recipient.

Most people focus on the requirements to “qualify” for Medicaid assistance.  Indeed, Medicaid’s qualification are the subject of a great deal of discussion and misinformation.  The reality is that far more people qualify for Medicaid assistance than you might think.  A senior citizen may have a significant amount in assets, and income, and still qualify for Medicaid assistance.  

However, a senior citizen who receives Medicaid assistance will also pay a cost.  That cost shows up after the services have been provided.  If you receive Medicaid benefits, your estate will be expected to reimburse Medicaid at your passing.  Your children will only receive a distribution at your passing if there are still assets after Medicaid has been reimbursed. 

There is a difference between receiving assistance and doing so in a way that allows you to preserve the estate you wish to pass on to others.  For those who have no other option, Medicaid is critically important.  However, if you have spent a lifetime building an estate you wish to pass on to your posterity, relying on Medicaid for long term care may be the most expensive option of all.

© 2017 Steven J Wright  

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