The High Cost of a “Free” Medicaid Plan

attorney free medicaid plan Sep 26, 2022

There are so many myths, folk remedies, and outright falsehoods surrounding Medicaid qualification for nursing home care that it becomes impossible to list them all. Unfortunately, it becomes easy for people to look online for the simple answers they want to hear rather than  researching and understanding a much more complicated truth. And going to the Medicaid Office for help (free Medicaid Plan) is probably the worst thing someone can do.

I recently spoke for the second time with the son and husband of a woman already in long-term care who was trying to qualify for Medicaid. I had previously sent to her a non-attorney, fellow Certified Medicaid Planner™ colleague because the “spend down plan” for about $40,000 extra was not going to need trusts or other legal documents, and it would have been a lot less expensive engaging the other professional’s services. Now I spoke with the son and husband nearly ten months later, and they informed me that all they needed was help with a “Medicaid-friendly immediate annuity.” I asked if the other professional had suggested that, and they informed me that instead of engaging him they got a free Medicaid spend down plan from the Medicaid Office. Here is what happened during those ten months under the Medicaid Office’s free plan:

  • Husband took out a line of credit against the house to pay for about $35,000 of his wife’s medical bills;
  • Husband had spent tens of thousands of dollars of HIS money while not touching his wife’s accumulated money;
  • Mom still had $37,000 in an IRA, which was nearly the same amount they discussed with me ten months earlier, and that was the money they wanted to put into a Medicaid-friend immediate annuity at the Medicaid Office’s suggestion.

By the time I got all of this updated information from the husband and son, I could only shake my head. The Medicaid caseworker essentially advised them to spend everything except mom’s money, including going into medical debt and then taking a lien against the family home to pay it. They were also under the impression that mom’s income could have been used by them to pay down the line of credit after Medicaid kicked in, and that was simply not true. And here’s the kicker… the Medicaid-friend immediate annuity would have set up a stream of income TO MOM which would have had to go to the nursing home first, thereby reducing the amount Medicaid had to pay.

At this point, there was little I could do except suggest they use Mom’s money in her IRA to pay the taxes and use whatever is left to pay off the line of credit. Ten months was wasted, they went tens of thousands of dollars into debt, and they lost all of the assets they could have preserved… all to avoid paying a few thousand dollars to a professional. Sometimes there is an extremely high cost for a free plan.

To learn more about Medicaid Planning, check out my free webinar on The Top Ten Don’ts of Medicaid Planning at or check out my YouTube channel at and view the Medicaid Planning playlist.

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