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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Medicaid planning details?

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: In a recent article you posted: "Under federal laws a financial adviser is not allowed to assist in providing advice to aid in protecting assets from Medicaid claims other than using a few "standard" measures that are commonly accepted, like putting retirement investments into a Medicaid-qualified annuity account and keeping the maximum allowable cash value in a life insurance policy. This kind of planning is best conducted in a one-on-one session so you may request an OnlineAdviser appointment to work out the possible solutions." Do you have a reference to these allowed Federal spend down “programs"?

A: This is a difficult subject for an adviser, even more so for a financial writer. Americans are angry with elder law attorneys and financial advisers who help those with financial resources qualify for Medicaid. The laws continue to change to make it more difficult to qualify for benefits in order to protect this program for the truly indigent. On the flip side, another large group of Americans feels that it is their right to qualify for government-paid long term health care benefits without spending all of their assets. An adviser is caught in the middle. No one would object to an adviser who is held to a fiduciary responsibility telling an individual client what steps would best assure their financial security. In contrast, publishing references and details about such measures or advertising a similar service would appear to be a violation of federal law. The critical legal difference here is the existence of a fiduciary relationship prior to the consideration of Medicaid qualification. The primary focus on my mention in the article to point out that another approach to the problem does exist and, for many, is more cost-effective in the long run than continuing to wrestle with difficult problem of insurance affordability.


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