Many clients wonder how they can prevent medicaid estate recovery.

If you don’t know what “estate recovery” is, I have some blogs about it that you can read. But I’ll provide a brief synopsis here.

Medicaid is free healthcare aimed at lower income to middle income individuals. Programs like “husky D” in CT and “masshealth” in MA are part of the medicaid program. If you don’t pay for your healthcare, you likely have medicaid.

Now, even though Medicaid is “free”… it’s not … actually free… I’ll explain..

The state is required by federal law to recoup the costs of Medicaid that you spent. Since nursing homes are the highest costs of Healthcare in the US… I think somewhere around 18% of Medicaid subscribers are in nursing homes but they eat up like 70% of the costs or something (don’t quote me, I’ll find the stat somewhere)… regardless, nursing homes and end of life care is the most expensive Healthcare cost in America.

So in order to break even on the free services that Medicaid provides, they recoup assets of people who receive Medicaid who are over 55 or for people who are in nursing homes ONLY when they die… or sometimes they can recoup the expenses during life if certain situations exist. For example if you’re in a nursing home never expected to return home, Medicaid can come after your assets during your life.

Also, if you get into a car accident and Medicaid pays your medical bills…if you win a settlement…Medicaid will place a lien on your settlement to recoup whatever you spent in the hospital.

Anyway, there is a complex web of Medicaid law and situations that may apply to you. Medicaid makes it VERY hard to beat the system and they’ve closed most existing loopholes.

the problem is, once someone finds a loophole, Medicaid just passes legislation to close it. It used to be way easier to get free healthcare and never have to pay it back… now it’s very difficult

What’s more is that Medicaid programs are starting to bring people to court even when they used tried and true Medicaid loopholes!

It used to be that having your assets in an irrevocable trust or passing your house through a life estate were nearly airtight ways to avoid Medicaid recovery… They’re still good options but Medicaid has been testing these strategies in court…but they haven’t won

This is such a big issue to congress because in their view Medicaid loses tons of money. Congress actually briefly made it a crime for lawyers to advise clients on how to avoid estate recovery!

So, as you can see it’s a hairy issue. Anyway..

HOW DO I AVOID ESTATE RECOVERY?

I’ll say this- in order to avoid estate recovery you have to show Medicaid that you are broke. There are ways of doing it through trusts and life estates but at the end of the day you have to do a really convincing job of being broke. That means you can’t own money over $2,000. So if you’re a rich guy reading this or if you have 100k in your bank account, just think- you’d have to purposely impoverish yourself. There’s no comfortable way of doing this. You can put assets into trust but Medicaid has specific laws that say you can’t use the assets in the trust.

Medicaid planning is extremely complex and one mishap can screw you up.

Anyway, if you need a will or if you’ve been in a car accident call or email me

207 550 5604

Dresslerjake@gmail.com