What is Medicaid?

Medicaid is a Federally funded government assistance program for low income individuals and individuals of lesser means.  Medicaid is intended to pay for the long term care for individuals who do not have the assets to pay for the care themselves.  As you can imagine, the Medicaid program is a tremendously expensive government supplement.  There is concern, as with many other government programs, that Medicaid cannot be sustained in its present form.   Read this Health and Human Services review of Medicaid.

Although the program is Federally

Douglas L. Kaune, Esq.

funded, the plan is managed on a state by state basis. In Pennsylvania (PA), the applications for Medicaid are submitted to the Department of Public Welfare (DPW) through their County office locations. The list of PA DPW County Offices and contacts can be found by clicking here. Medicaid was originally designed for the indigent and those who could not afford medical expenses. The program has expanded to include many individuals who are or were considered to be a part of the middle class. Medicaid is now most commonly understood to be the program that will pay for the skilled nursing home care of those who have run out of personal assets. Many clients choose to enter into planning to help accelerate their ability to qualify for Medicaid thereby protecting an inheritance for their family.  As nursing care costs rise, the government is having a harder and harder time paying for the aging population.  To make financial matters worse, people are living longer and being cared for less frequently at home by their family members.  All of this adds up to a financial strain on the government that may very well result in modifications to the the Medicaid eligibility rules.  This is just something to keep in mind because, if anything, the rules will be made more strict.  If you are considering gifting assets, you might want to do that planning now under the present rules and before any law changes are implemented in the future.

Medicaid estate planning and Medicaid eligibility rules are complicated. Through the Deficit Reduction Act of 2005, the government is now requiring a 5-year look-back to determine if any transfers for less than market value were made by an applicant. If such transfers are made, the individual will be determined ineligible for Medicaid payments for 5 years.  If you are considering gifting to protect assets, please seek professional guidance as there are many traps for the unwary both relating to the Medicaid rules and other tax and family concerns.

We are working with our clients to plan far in advance for the possible need for nursing home care. Nursing home spending is now the biggest “tax” on the middle class. Planning now to protect your assets for you children and loved ones is the best way to insure all is not lost on nursing home spending.

Douglas L. Kaune. Esq. is a Partner and Chairman of the Elder Law Section of Unruh, Turner, Burke & Frees, P.C. You can meet with Doug in any one of his three convenient suburban Philadelphia offices located in West Chester, Malvern and Phoenixville. Please call Doug at 610 933 8069 to schedule a time to meet and discuss your estate and Medicaid planning goals and needs.