Health Crisis Can Cost Clients

Let me know if this sounds familiar.  You have a long-time client who you’ve worked with for several years.  Maybe you’ve help them invest their money for retirement or you were instrumental in rolling over their 401K.  Sure, they should have bought long-term care insurance … but they’re like most people and just didn’t.

Then you get the call one day.  The husband’s had a stroke and is in a nursing home.  The family knows that Medicare’s 100 days of coverage will run out soon and they have way too many assets to qualify for Medicaid.  In fact, that’s why you get the call.  The family is trying to figure out how much money they have available to “spend down” on nursing home costs.

Do you understand the difference between Medicare and Medicaid?

Do you know how the Medicaid spend down works?

Do you know that in many cases, assets can be shifted to the healthy spouse or converted into an income to the healthy spouse and allow the married spouse to re-accumulate the income while still allowing the spouse in the nursing home to remain fully eligible for Medicaid coverage.

Most of the time, the only call the financial advisor gets is when the client needs to move all their money into a Medicaid-compliant annuity to avoid the spend down.  You watch your client and their money you have under management fly straight out the window through no apparent fault of your own.

In the process you’ve missed an amazing opportunity to be a more thorough advisor to the clients and help guide them through the Medicaid eligibility process.  In a majority of Medicaid planning cases, even when an attorney is involved in the planning process, there is a need for a financial advisor to help with eligibility by providing protected funeral trusts and Medicaid-compliant annuities.  Many times, assets under management can also retain their original form by being transferred into a spousal annuity trust that works similar to a Medicaid-compliant annuity.

If this scenario doesn’t already sound familiar, it soon will be.  The frequency of Medicaid Planning cases continues to grow.  Eighty million Americans will be over 65 by 2040 and over half of them are expected to require some kind of long-term care.[1]  That’s not just going to affect your clients; it will affect your future clients, the people who you want to be your clients, and your own extended friends and family members.  With the cost of an average nursing home bed being over $6,000 per month – just slightly less expensive than booking a suite at the Ritz – you can’t afford to miss the opportunities to help the people you come in contact with.

For many advisors that want to learn the subject matter intimately, we offer the Certified Medicaid Planning (CMP™) course.  This in-depth course teaches attorneys, insurance agents, financial advisors, care managers, nursing home administrators and certified public accountants on the nitty-gritty of Medicaid eligibility, how to pre-plan to better position a client for eventual crisis, how to manage the crisis situation for the client from the perspective of their discipline, how a Medicaid plan is put together and implemented and how to file and shepherd an application.  Federal regulations allow the patient to choose anyone – even a non-lawyer – to help with filing the Medicaid application.[2]  Heaven forbid you don’t understand the impact of your advice on your client’s eventual Medicaid eligibility; many advisors are being sued because their advice was inconsistent with solid Medicaid Planning principles and we want to help you avoid that.


Some advisors don’t want to get that involved, but at the same time they don’t want to hand the client over to complete strangers to solve their Medicaid Planning needs.  For many advisors in that circumstance, we provide numerous resources to advisors to help you help your clients.  This includes Medicaid Planning support services, assistance with designing a workable Medicaid Plan – including the latest tools available to help protect assets, consulting on complex cases, Medicaid-compliant financial servicesc annuity design support, and mentoring assistance.  For those looking to expand their practices to include more Medicaid Planning opportunities, we provide assistance with marketing.  We encourage planning on a team-based approach and work to supplement an advisor’s planning team with our in-house team and our network of local planners with a variety of disciplines to make sure that your clients get all the bases covered.  Our goal is to provide value to you by helping you make sure that both opportunity and your clients don’t slip through your fingers when a health crisis occurs.


[1] Centers for Disease Control and Prevention, National Center for Health Statistics. Health, United States, 2005: With chartbook on trends in the health of Americans. Hyattsville, MD: Centers for Disease Control and Prevention. 2005.

[2] 42 C.F.R. sec. 435.907 and 435.908.  Note, however, that Texas state law – contrary to Federal law – prohibits a person who is not licensed to practice law in Texas from charging a fee for representing or aiding an applicant or recipient in procuring assistance from their state Medicaid department. TEX HR. CODE ANN. § 12.001