WSJ: Medicaid Getting Harder to Tap for Long-Term Care

Families who are hoping to use Medicaid to pay for a loved one’s long-term care might find some tough restrictions depending on what state they live in, reports the Wall Street Journal, with some states looking to beneficiaries’ estates to retrieve money.

Medicare doesn’t cover much in the way of long-term care. That falls primarily to Medicaid, the jointly funded state and federal program intended for the poor. The program now is shouldering 40% of the country’s long-term-care spending, according to the Kaiser Family Foundation.

To be eligible for Medicaid in most states, you generally can have no more than $2,000 in cash and investments, along with a house and a car. (Spouses are allowed to keep varying amounts as well in different states.) In the past, regulators looked at any gifts you made up to three years before applying for Medicaid. In 2006, a new federal law increased the “look back” period for most transfers to five years.


States are in charge of qualifying people needing long-term care for Medicaid, working within federal rules, and that leaves room for different interpretations, says David Zumpano, an estate-planning lawyer and CPA in New Hartford, N.Y.

“States are adopting the Nancy Reagan strategy—they just say ‘no,'” he says.

Some states, anticipating budget shortfalls, are looking to Medicaid beneficiaries’ estates to retrieve money, according to Zumpano, and the articled listed Iowa, Minnesota, Missouri, Nevada, New York, North Dakota, South Dakota, Tennessee, and Virginia as states “tinkering with ways to recover Medicaid expenses.”


Because of this, some asset-rich families are looking for ways to preserve their assets and still qualify for federal and state help. The full Wall Street Journal article includes some methods, which include creating a trust, buying long-term care insurance to “fill the gap,” or transferring a home’s title to children.

Written by Alyssa Gerace

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