Myths and Facts of Medicaid Planning By Steven & Blake Rainey S.A.F.E. Planning, Inc. July 2002 Myth: Savings and property have to be "spent down" in order to qualify for Medicaid. Fact: Medicaid planning is a lot like filing an income tax return, you can do your own taxes and just claim the standard deductions available to everyone, or you can consult a specialist and claim deductions you are entitled to and, thus, reduce your tax liability. The IRS does not care if you do not take all of the deductions the law will allow. It is not their job to help you reduce your taxes. As a result, many people in this country overpay their income taxes. However, the individuals who do consult a tax specialist can legally reduce the amount of money they have to send the government. It is important to realize that there are many wonderful and caring people that work for the Department of Health and Hospitals, and while they want people to receive the benefits that they are entitled to, they are not allowed to "advise". Simply put, they cannot, and will not, do your estate planning for you. They, like the IRS, post the standard limits concerning savings and property in order to qualify for benefits. It is up to us to take the initiative to find out what our rights are. While many are overpaying their income taxes, many more are not claiming the benefits they are entitled to when facing the expense of long term care. The Medicaid laws, like the tax laws, are complicated. A specialist in this area can save you a lot of money. One big difference in the two is that the IRS cannot take more than 55% of your money. Nursing home costs, on the other hand, can take it all. Since long term care could be a greater threat to your finances than the IRS, it would seem that those at risk should have the services of a Medicaid specialist, as well as a CPA. The fact is there are provisions in the law that will allow us to protect most of a family's property and savings if a loved one has to have long term care. There are families that have sufficient assets to afford the $30,000 to $40,000 annual expense of a nursing facility without endangering their estate. It is those who are faced with depleting almost all that they have accumulated who are most at risk. The good news is that in most cases these families can qualify for benefits that will keep them from losing their life's savings. As displayed in Best of Times (formerly Senior Scene)

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