Medicaid – A Complex Solution to a Complex Problem

By Darius Rohani-Shukla, Elder Law Clinic Student, Spring 2016

In many walks of life, when someone is confronted with legal complexities, an obvious solution is to consult a lawyer.  However, indigent elderly people often cannot afford a lawyer, and at this intersection, the Elder Law Clinic is able to fill an important need to the Williamsburg community. The life span of an average person has lengthened over time due to medical advances, so as the “baby boomer” generation ages, there are significantly more elderly citizens than ever before who will need help taking care of themselves.  Elder Law as a whole is a field that is becoming increasingly important and relevant to society; it incorporates a wide range of issues that affect the elderly, such as estate planning, creating trusts, guardianships, powers of attorney, veterans benefits, and Medicaid.

Medicaid is a welfare health care program;  the eligibility rules are confusing and thus qualifying for benefits can be very overwhelming.  There is a litany of options available to them in order to achieve both the financial and non-financial determinations of eligibility.  Financially, there are limits on assets and income, and there are several ways of “spending down” the assets to become eligible. Some examples are putting  money into different types of trusts, annuities, personal property, renovations to a personal residence, burial plots, cars, houses, and specific types of life insurance.  Each of these options can have specific costs and benefits unique to it, and depending on the individual, may be more effective or less.  Making a mistake in these areas by transferring assets in a way that does not comply with the Medicaid rules can cause a penalty period, where for a certain length of time the individual will not be eligible for Medicaid.  If this occurs, the individual will have to either pay for care out of pocket, be taken care of by family, or if already living in a facility, become the financial responsibility of the facility until the penalty period expires.  For this reason, it is of the utmost importance that when a person expects to use Medicaid to pay for long-term care expenses, he is careful in making any transfers of assets and consults a lawyer for legal advice on the eligibility and transfer rules. Mistakes made can have significant affects on the person, both financially and personally, and potentially for the rest of his life.