We Elder Law attorneys do not hide assets. Hide is literally a four-letter word and has no place in an Elder Law practice. Elder Law attorneys legally protect or shelter assets using the applicable laws that are available. Medicaid Asset Protection is absolutely ethical and moral; in fact, it is the right thing to do if a family is concerned about the long-term care of a loved one. From a moral and ethical standpoint, Medicaid planning is no different from income tax planning and estate planning.

Income tax planning involves trying to find all the proper and legal deductions, credits, and other tax savings that you are entitled to — taking maximum advantage of existing laws. Income tax planning also involves investing in tax-free bonds, retirement plans, or other tax-favored investment vehicles, all in an effort to minimize what you pay in income taxes and maximize the amount of money that remains in your control to be used to benefit you and your family.

Estate planning involves trying to plan your estate to minimize the amount of estate taxes and probate taxes that your estate will have to pay to the government, again taking maximum advantage of the existing laws. Similar to income-tax planning, estate planning is a way to minimize what your estate pays in taxes and maximize the amount of money that remains in your estate to be used to benefit your family. Similarly, Medicaid planning involves trying to find the best methods to transfer, shelter, and protect your assets in ways that take maximum advantage of existing laws, all in an effort to minimize what you pay and maximize the amount of money that remains in your control to be used to benefit you and your family.

Like income-tax planning and estate planning, Medicaid planning requires a great deal of extremely complex knowledge due in part to frequently changing laws, so clients need to work with experienced Elder Law attorneys who know the rules and can give proper advice.

For seniors over the age of 65, Medicaid has become equivalent to federally subsidized long-term care insurance, just as Medicare is equivalent to federally subsidized health insurance. Congress accepts the realities of Medicaid Planning through rules that protect spouses of nursing home residents, allow Medicaid Asset Protection via the purchase of qualified Long-Term Care Insurance policies, allow the exemption of certain types of assets, and permit individuals to qualify even after transferring assets to a spouse or to a disabled family member or to a caregiver child. To plan ahead and accelerate qualification for Medicaid is no different from planning to maximize your income tax deductions to receive the largest income tax refund allowable. It’s no different from taking advantage of tax-free municipal bonds. It’s no different from planning your estate to avoid paying estate taxes.

Within the United States, seniors over 65 generally have a right to medical care, but not to long-term care. Medicare Part A Coverage (which covers hospital visits) is free to people who have worked for at least 40 quarters (generally 10 years). No one in the US (regardless of age and citizenship) can be turned down from medical care in a hospital emergency room because of EMTALA (the Emergency Medical Treatment and Labor Act), which requires hospitals with emergency departments to provide a medical screening examination to any individual who comes to the emergency department and requests such an examination.

Does any similar program pay for long-term care in our country? The answer is a HUGE NO! In the US, nobody has a basic right to receive any type of care that is classified as long-term care. Why? It’s just how our American healthcare system has evolved over our country’s history, and politicians have not yet figured out that perhaps long-term care should be considered a basic human right (as it is in many other countries).

Medicaid Planning is Required to Overcome our Country's Discriminatory Health Insurance System

This inherent tragedy means that our American health insurance system discriminates against people suffering from certain types of chronic illnesses, such as those that routinely result in the need for long-term care, such as: Alzheimer’s disease, Lewy Body dementia, Vascular dementia, FTD (Frontotemporal dementia), and other types of dementia; Parkinson’s disease; Huntington’s disease; ALS (Amyotrophic Lateral Sclerosis), Multiple Sclerosis, or Muscular Dystrophy; severe spinal stenosis; severe gout; and any other of the dozens of types of progressive neurodegenerative disorders or neuromuscular disorders that result in the need for long-term care. Any person suffering the tragedy of one of these diseases in the U.S. must also suffer the tragedy of having the wrong disease according to our American health insurance system.

Why should someone with brain cancer – tumors in the brain that aren’t supposed to be there – have all of his treatment (chemotherapy, radiation, and surgery) covered by health insurance, yet someone with Alzheimer’s – plaques and tangles in the brain that aren’t supposed to be there – must pay for his care out of pocket until he goes broke. In both cases, we are dealing with the care that someone needs because of the disease that person has. How is the differing result fair? It’s not.

Is it an ethical social policy that seemingly arbitrarily distinguishes among these different types of illnesses? Is it an ethical social policy that provides full coverage for most illnesses – whether chronic or acute – but forces Americans with certain chronic conditions (many of them elders) to become impoverished in order to gain access to the long-term care necessitated by their particular type of chronic illness? Is it a surprise that Americans suffering the wrong type of chronic illness will want to look for legal ways to preserve the efforts of their lifetime in order to protect themselves from this unfair and seemingly arbitrary social policy?

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