What are the disadvantages of Medicaid in Arizona? Yes, there are some. You need to know what these are before you pull the trigger and do something that you’ll later regret.
There are three big disadvantages that can be broken down. First, you have to qualify, and that might be tricky. It might take some work, effort, rearranging of the finances, a new trust, a special kind of annuity, gifting plans, and tax planning. It might take a lot of work to financially qualify.
That’s where you’re going to decide if that’s worth it or not. Generally, a good planner can help you weigh the cost-benefit of doing all the financial planning that’s necessary to be qualified so that you get all the benefits.
It’s like a math equation. We’re going to invest, or it’s going to cost us much in financial planning and get everything so we do qualify. And we’re gonna get this much from Medicaid and financial benefits.
Generally speaking, it claims that a 10-x return on what it costs to do the financial planning. That’s the first thing. It takes some financial planning.
The second downside is that it restricts you to where you can go live. If you need nursing home care, you can only go to the places that accept Medicaid as a benefit. The way Arizona works, is through a program called Arizona Long Term Care System (ALTCS).
What that means is the facility, memory care center, group home, or company you’re working with must be a contracted provider for the ALTCS insurance plan. That’s how they administer their insurance policy. They have to be contracted with them, and then you’re limited to those providers, just like any health insurance.
So, you need to make sure that the place you’re looking at accepts ALTCS or Medicaid as a payor.
The last downside isn’t a big downside but something you just need to be aware of. If you don’t do the right financial planning upfront, when you pass away, Arizona has something called estate recovery. When you die, ALTCS can file a lien to try to get back what they paid for benefits from your estate. There are some nuances there. Sometimes, it’s not very easy for them to do that, but that’s the potential downside.
You need to know that if you get on Medicaid and they start paying 50, a hundred, 200, 300 thousand dollars while you’re alive and benefits, they can file a lien to try and get that from the estate. You want to make sure that you have planned appropriately so that your estate can go to your kids, your spouse, and your loved ones.
Those are the downsides I could see. If those are downsides for you, then I would hit the brakes. If you want to figure out how that planning works to avoid some of those downsides, give us a call. We’ll sit down and figure that out with you.
Medicaid has some disadvantages, which you can prevent if you know how to plan your finances. Financial planning doesn’t have to be hard if you have someone on your side. Keystone Law Firm offers consultations and services that can help you plan your finances and avoid some of the downsides regarding Medicaid.