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Why do I need to start Medicaid planning early?

On Behalf of | Sep 27, 2023 | Blog, Long Term Care Planning

Initiating Medicaid planning should ideally start long before the need for long-term care arises. Waiting until a health crisis occurs can limit your options and potentially deplete your assets.

To make informed decisions, it is important to understand the key considerations involved with Medicaid.

Navigating the look-back period

Medicaid examines financial transactions over the past five years when determining eligibility. Substantial asset transfers during this period can result in a penalty period during which Medicaid will not cover long-term care costs. Timing asset transfers carefully helps people avoid penalties.

Managing financial assets

Consider your financial assets and how they affect Medicaid eligibility. Medicaid has income and asset limits that individuals with substantial wealth often exceed. To qualify for Medicaid while safeguarding assets, strategic financial planning may be necessary. This can involve converting countable assets into exempt assets, such as a primary residence, personal items and specific life insurance policies.

Leveraging irrevocable trusts

The use of irrevocable trusts can play a pivotal role in protecting assets from Medicaid’s resource requirements. However, setting up and funding these trusts must be done correctly to comply with Medicaid regulations. A well-executed trust strategy can be instrumental in preserving assets.

Exploring long-term care options

While Medicaid covers nursing home care, it may not include all types of long-term care services. Explore alternatives like home care or assisted living as they may better align with your needs and financial situation.

People over 65 have a 70% chance of needing some form of long-term care. Properly navigating the complex Medicaid process early can help preserve your wealth while ensuring you receive the necessary healthcare coverage when the time comes.


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