Medicaid is a government program that, among other things, provides health care coverage to people who do not have enough money to pay for their own health care. This program includes financial coverage for people who are in nursing homes. While it is a federal program, it is run and administered by state agencies, so each state tends to put its own flavor on what some of the laws actually mean.  However, in most states, coverage is only available to nursing home residents who are impoverished thus requiring the proposed recipient to “spend down” most of their assets in order to qualify. This can be especially burdensome for married couples when only one person is in the nursing home (called the “institutionalized spouse.) The person remaining at home (the “community spouse”), would normally also be impoverished. However Federal law allows for the protection of the Community spouse in a variety of ways. Those ways are intricate and convoluted and require a great deal of knowledge to navigate. This is where Medicaid planning comes in. Such planning is the province of attorneys who practice Elder Law.

Medicaid planning over the years has become a moving target. With understaffed state agencies and courts weighing in heavier on how certain programs should be run, it becomes hard to assess how the future landscape looks. While Medicaid planning is accepted, indeed promoted, by the government to protect the Community Spouse, it is not intended to help wealthy folks hide their assets and then look to the taxpayer to fund their care.

One recent Massachusetts case shed some light on how the court may view planning intended to “protect the home from the nursing home”. The court in Dermody vs. Executive Office of Health and Human Services provided an opinion that said in part:

“[w]hen affluent individuals engage in schemes to hide assets in order to qualify for programs to which they are otherwise not entitled, their actions improperly “divert[] scarce Federal and State resources from low-income [qualifying individuals]

The opinion further stated that:

(“The Medicaid program . . . is designed to provide health care for indigent persons. Individuals are expected to deplete their own resources before obtaining assistance from the government. The unfortunate reality is that some individuals with significant resources devise strategies to appear impoverished in order to qualify for Medicaid benefits”).

With different states adding their own flavor on how the program should function, it becomes difficult for attorneys to know exactly how to handle this Medicaid planning. But what does become clear is that the state wants it to become harder for people to shield their assets while still protecting the Community spouse. If you or a loved one are concerned about potential Medicaid planning, you should consult with an attorney experienced in this area. Look for an attorney who is a member of NAELA, the National Academy of Elder Law Attorneys.