I have a long term care insurance policy, should I still consider Medicaid planning?

One of the most effective strategies for planning for nursing home and long term care is to combine a long term care insurance policy with other Medicaid planning strategies.  Depending upon the terms of the policy, the long term care insurance can be used for home care and levels of care lower than nursing home care.  Thus, it can be used during the ‘transition’ phase before you need full on nursing home care (Medicaid is only available for nursing home level care). 


In addition, the long term care insurance can provide you with greater flexibility when it comes to facility selection as you will not be required .  However, if you use up all of the long term care insurance benefit and continue to need care, this is when your planning will transition to Medicaid qualification for assistance paying the cost of nursing home care.

Finally, the cost of nursing home and long term care is constantly increasing.  Thus, if your long term care insurance does not include an inflation rider or at some point becomes too expensive for you to maintain, if you’ve already engaged in Medicaid planning, you’ll have a back-up plan to fall back on to either replace the insurance or fill in the ‘gap’ if your long term care insurance benefit is not enough to cover the cost of the nursing home.