By Stanley M. Vasiliadis
On July 21, I had the opportunity to present a program at the 20 th Annual Elder Law Institute in
Harrisburg. This event is sponsored by the Pennsylvania Bar Institute and is an educational
workshop for attorneys. The presentation illustrated how financial products such as life
insurance, annuities, and long-term care insurance can combine with Medicaid planning to
protect families against the financially ruinous costs of long-term care.
David Littell, Professor of Taxation at The American College, was the co-presenter. He explained
and compared “Hybrids” (life insurance and annuities with a long-term care feature) with more
traditional long-term care insurance (LTCI) and observed that Hybrids are rapidly overtaking
LTCI in popularity among consumers.
For all but the very wealthy, prudent long-term care planning must incorporate public benefits
eligibility, particularly planning measures to qualify for Medicaid. Only Medicaid ensures full
financial coverage for nursing home care for as long as it’s needed and carries no time or
dollar limits. Anyone can afford Medicaid once qualified, since the cost to the benefits
recipient (the “patient pay” obligation) is limited to the benefits recipient’s income.
Unfortunately, impoverishment is the price of admission into the Medicaid program. However,
with proper Medicaid planning, a person can qualify for benefits while at the same time
preserving assets and income essential for the financial security of one’s family.
Financial products and Medicaid planning need not – and should not – be mutually exclusive.
Hybrids and LTCI provide leverage that can substantially enhance the amount of Medicaid
gifting and other asset protection measures. These products effectively integrate with “non-
crisis” planning (the “what if, maybe, someday” concerns) as well as “crisis” cases (where the
insured has already become incapacitated). A few examples of this integration include:
- Purchase of “Partnership” LTCI which enables an insured to protect assets equal to the
amount of insurance paid out
- Funding of an asset protection trust concurrently with purchase of LTCI (“5 and Out”)
- Assignment of LTCI to a community spouse
These are just three possibilities. There is so much we can do to protect hard-earned assets and
families from the ruinous cost of long-term nursing home care.
To learn more, simply contact my office, and we’ll be glad to send you a free copy of the written
presentation. (610) 694-9455