Who is Medicaid for?

Isn’t Medicaid for poor people?

This is a common question. Most people know that Medicaid is a social safety net program providing health insurance to people with very low incomes. How can someone in the middle class benefit from Medicaid? And how can anyone who would qualify for Medicaid pay a lawyer?

Although providing health insurance to poor people of all ages is an important part of Medicaid, it’s not the only part. Medicaid can also pay for the long-term care of the elderly, blind, or disabled, even those who have middle-class income and assets, if the cost of care exceeds their income. In fact, Medicaid pays for 50 to 60% of all long-term care in the United States; it’s the de facto long-term care insurance plan for the middle class. That’s the part of Medicaid I deal with.

Think of it this way: When facing a health care bill of $9,000 per month, we’re all poor.

Or consider that nearly a third of people turning age 65 will deplete their savings and need to rely on Medicaid, full stop. In other words, one third of people 65+ are or will be poor by Medicaid’s standards.

As AARP puts it:

Medicaid provides a critical safety net not only for low-income people, but also for formerly middle-income people who have spent their life savings paying for long-term services and supports.

Medicaid: long-term care for the middle class

So most of my clients are, in fact, middle-class. They (or their families) come to me once they know they will need long-term care. They look at the cost of a nursing home, look at their life’s savings, and face a simple fact: they may not be poor yet, but they will be. Someone tells them they should look at Medicaid. That’s when they know they need help.

These people still have money, but it’s evaporating rapidly. Without legal help, they will lose nearly all their savings—they’ll end up with $2,000 if single, or somewhere between $50,000 and $140,000 if they have a spouse. The rest of their money is going away—to pay for one more nursing home bill before Medicaid kicks in, if nowhere else.

That’s not to mention the many pitfalls in navigating a Medicaid application. Problems of divestment, timing, backdating, legal authority, documentation, correcting agency mistakes, and getting all of what you’re entitled to are common.

The good news is you don’t have to sit back helpless. You can be proactive. With planning, you can pass some of that money on to family, use it to prepay for a funeral, use it for your own current needs, or set it aside for your own future needs. With planning, you can address or avoid the many pitfalls in the application process. That’s what an elder law attorney does: helps you make the most of what you have while avoiding Medicaid problems. The savings in time, money, and frustration are well worth the legal fee.