What is a Medicaid Crisis Plan?
A Medicaid Crisis Plan is the last line of defense to save at least some your assets if you are in need of long-term healthcare and failed to plan for it.
A properly drafted Minnesota Medicaid Crisis Plan will make you eligible for Minnesota Medicaid coverage by using a combination of gifts and loans that meet federal guidelines while saving 40-50% of your assets from being used to pay for your long-term healthcare.
Top 3 Options for Paying your Long-term Healthcare Costs:
- Long-term Health Care Insurance
- Private-pay (aka YOUR ASSETS).
If you are soon to need long-term healthcare and do not already have Long-term Healthcare Insurance, it is likely too late – you may be uninsurable, or your premiums will be too high to make it cost effective. However, please contact your insurance provider for more details.
If your assets and/or income surpass the modest Minnesota Medicaid eligibility criteria, then you will not qualify for Medicaid.
Therefore, if you do not have Long-term Healthcare Insurance and you are ineligible for Medicaid Coverage, there is only one option left: private-pay (aka YOUR ASSETS).
If you only left with private-pay and still fail to take any action, your assets will be liquidated and used to pay for your long-term care until either you pass away, or your assets have been extinguished to below the original criteria threshold for Medicaid eligibility. Your legacy will go to a long-term healthcare facility. There will be little – to nothing – left the leave to your family and loved ones.
However, most people don’t simply want to see their hard-earned assets liquidated and given to a nursing-home or other long-term healthcare facility. That is where a Medicaid Crisis Plan comes in. A Medicaid Crisis plan is your LAST opportunity to save at least SOME of your assets from being liquidated to pay for your long-term healthcare. This may be your last opportunity to leave any kind of legacy for your family and loved ones.
Will a Medicaid Crisis Plan save ALL my assets?
No. A Medicaid Crisis Plan is NOT the same as proper pre-planning!
A Medicaid Crisis Plan will can only save up to 50% of your assets from being used to pay/reimburse for your uninsured long-term healthcare.
However, as is said, “half a loaf is better than no bread at all.”
Top 3 Options for Paying your Long-term Healthcare Costs (e.g. nursing home care):
OPTION #1: Long-term Health Care Insurance
Most don’t purchase Long-term Healthcare Insurance simply due to policy/premium costs.
Because such policies should be purchased when you are in relatively good health and not at an advance age, if a person waits too long, they likely will either become uninsurable, or their premiums will be so high they don’t see any real benefit.
If you have never received a Long-term Healthcare Insurance quote, it is highly recommended you do so now. Contact your insurance provider for more details.
For those who do not have Long-term Healthcare Insurance at the time they need long-term inpatient health care, you will need to find another way to pay for your long-term health care.
OPTION #2: Minnesota Medicaid
Medicaid is a federal program administered by each state. States are not required to participate in the Medicaid program, but if they do choose to do so, they must abide by federal guidelines. Therefore all states that participate in the Medicaid program have common elements, but each state is allowed to modify their program based on the economics and other needs of their state.
For example, each participating state establishes eligibility standards, determines the scope and types of services it will cover, and sets the rate of payment. And these standards can change depending on location within the state. Because if you think about it, the cost of nursing home care in Edina isn't going to be the same as nursing home care in Ely - Minnesota Medicaid guidelines account for the disparity.
But what all Medicaid participating states in common is that they have strict rules relating to assets and income of any Medicaid applicant.
If you do not fall within their guidelines, you do not quality for the Medicaid program. This means if you are like most people and do not have long-term care insurance, you will be paying that monthly cost of your long-term inpatient health care out-of-pocket.
To help determine your potential Minnesota Medicaid eligibility, click here to be taken to the Minnesota Department of Human Services Income and Assets Guidelines.
But generally, if you have more than $3,000 in TOTAL assets ($6,000 for a household of two) OR earn more than $1005 per month (2017), you will ineligible for Medicaid until you reduce your assets and/or income below the required eligibility limits.
If you are in need of long-term inpatient health care (e.g. nursing home care), do not have already have Long-term Health Care Insurance and do not qualify for Minnesota Medicaid, there is only 1 option likely left:
OPTION #3: Private Pay (aka YOUR ASSETS)
This is the option MOST want to avoid!
As stated above, who wants to see their life's work liquidated and given to a nursing-home or other long-term healthcare facility instead of their family and loved ones?
If this is the situation you are, or may soon be in, then you NEED to consider a Medicaid Crisis Plan, NOW!
What Legacy do you want to leave:
- One of assets and stories of your savvy decision-making; OR
- One of poverty and stories of bad decision-making and what NOT to do?
A Medicaid Crisis plan is your LAST opportunity to save at least SOME of your assets from being liquidated to pay for your long-term healthcare and leave any kind of positive legacy for your family and loved ones.
How can I get a Medicaid Crisis Plan?
Unfortunately, you WILL need the assistance of an attorney to establish a Minnesota Medicaid Crisis Plan.
For the Medicaid Crisis Plan to work, it is essential that a compliant Promissory Note is created and other asset transfers are done properly.
This is NOT something a non-attorney should attempt! Mistakes here could result in a Medicaid denial and a lengthy - and expensive - Medicaid Penalty Period. During which, the person-in-need will be ineligible for Medicaid benefits.
This penalty period period could result in ALL of the assets being liquidated to pay for long-term inpatient care.
The goal of a Minnesota Medicaid Crisis Plan is 4-fold:
- Get a person-in-need qualified for Minnesota Medicaid benefits.
- Save up 50% of the person-in-need's excess assets from liquidation to pay for long-term inpatient health care.
- Transfer assets as to avoid inclusion in the Medicaid 5-year Look-back period.
- Avoid a Medicaid Penalty Period.
NOTE: the Medicaid Crisis Plan option is available ONLY for a limited time after entering a long-term healthcare facility!
If you think a Medicaid Crisis Plan may benefit you - or a loved one, Contact an Estate Planning Attorney TODAY!
Still have questions about a Medicaid Crisis Plan? Think you may need to get started on one?
Related Medicaid Planning Posts:
A Minnesota Medicaid Asset Protection Trust is an Irrevocable Trust designed to remove a Medicaid applicant’s ownership of non-exempt assets to qualify them for Medicaid coverage.
Don't shoot yourself in the foot! Making transfers of valuable assets in an attempt to hide them from Medicaid often results in large unforeseen losses - costing more money than if you had done nothing at all!