Medicaid - Medicare and Planning for the Future
To properly assist clients, elder law attorneys must juggle knowledge of a number of different public benefits programs, many of which have unique eligibility requirements. Additionally, with multiple planning strategies and instruments available to assist clients with public benefits, attorneys must also stay apprised of their distinctions. This blog is intended to provide both a definitional foundation and an up-to-date reference for the current year’s figures. It is best used as a supplement to your own research; it is not intended to be, and should not be considered, legal advice.
Medicaid
A needs-based, means-tested government healthcare assistance program administered jointly by federal and state governments.
Who qualifies?
Individuals, couples, and families living on limited income and assets (generally, $2,000 per month in most states). Medicaid also generally covers indigent children, pregnant women, and individuals living with a disability, including those who are institutionalized.
Important notes:
● Medicaid rules may differ greatly by state.
● The median nationwide nursing home cost for a private room is $10,646 per month (2025).
● Planning is advised at least five years prior to seeking Medicaid eligibility, with a Medicaid asset protection trust (MAPT) being the best practice for asset preservation.
● States must recover benefits paid from deceased beneficiaries’ estates.
● Elder law attorney consultation is recommended in both crisis and proactive situations.
Medicaid Asset Protection Trust (MAPT)
A self-settled irrevocable trust designed to hold assets in a manner that will meet strict Medicaid eligibility standards while providing a thorough and thoughtful final distribution of client assets.
For whom is it used?
Persons who are proactively planning to protect assets from future long-term care expenses and estate recovery or those who are seeking immediate Medicaid eligibility and the trust is being implemented as part of a crisis plan
Important notes:
● Assets within the MAPT are not subject to eligibility assessment after five years have elapsed since the conveyance, thereby providing asset protection.
● Gifts to a MAPT will incur a transfer-of-asset penalty, so using a MAPT should be done only under the guidance of an elder law attorney.
● Use of a MAPT is best practice for Medicaid planning.
Medicare
A federal health insurance program consisting of four parts: (1) hospital insurance, (2) medical insurance, (3) additional care-related benefits, and (4) prescription drug coverage.
Who qualifies?
Individuals age 65 and older, persons under 65 who have received SSDI for at least two years, and individuals with end-stage renal disease or Lou Gehrig's disease
Important notes:
● Part A: inpatient care, hospice, short-term skilled nursing
● Part B: outpatient care, medical equipment, preventative services
● Part C: Medicare Advantage
● Part D: prescription drugs
Supplemental Security Income (SSI)
A means-tested assistance program administered by the Social Security Administration (SSA) that provides financial support for basic necessities.
Who qualifies?
People with a disability who meet the SSA’s definition of “disabled” and seniors (age 65 and older), all of whom must meet strict income and asset limits
Important notes:
● SSI recipients also typically qualify for Medicaid.
● The 2025 maximum monthly benefit is $967 for an individual and $1,450 for a couple.
● Some states supplement SSI benefits.
Social Security Disability Insurance (SSDI)
A public insurance program for disabled workers.
Who qualifies?
Disabled workers with sufficient work credits who meet SSA medical criteria
Important notes:
● SSDI is not means-tested.
● Medicare eligibility is typically granted two years after SSDI payments begin.
● The 2025 maximum monthly benefit is $4,018.
Special Needs Trust (SNT)
A trust that supplements an individual’s assets while restricting direct access to the funds.
For whom is it used?
Persons who are living with a disability, receiving public assistance, or whose life circumstances necessitate a barrier of protection between the beneficiary and their money
Important notes:
● A first-party SNT is created from the beneficiary’s funds, must include a Medicaid payback provision, and protects the beneficiary from becoming ineligible for public assistance. First-party SNTs are often referred to as d4A trusts in reference to 42 U.S.C. § 1396p(d)(4)(A), the federal statute that authorizes and sets the guidelines for their use.
● A third-party SNT is funded by others, requires no Medicaid payback, and protects public assistance, if necessary. These trusts should be utilized in general estate planning, whether contingent or standalone, to ensure proper distribution and no adverse consequences for the recipient.
SECURE Special Needs Trust (SSNT)
A specialized third-party SNT designed under the provisions of the SECURE Act to hold retirement assets and ensure continuing access to public benefits and lifetime stretch on distributions for disabled or chronically ill beneficiaries.
For whom is it used?
An individual with a qualified retirement account who wants to provide an inheritance to a disabled or chronically ill beneficiary while ensuring that they remain on public assistance
Important note:
● An SSNT must be drafted to ensure sole beneficiary status for a disabled or chronically ill beneficiary.
Supplemental Nutrition Assistance Program (SNAP)
Federal nutritional assistance program (formerly called food stamps).
Who qualifies?
Households with limited resources, including seniors (age 60 and older) and people with disabilities who meet specific criteria
ABLE Account
Savings account that allows disabled individuals to save without affecting means-tested benefits.
Who qualifies?
An individual who acquired their disability before turning 26 years old and is either receiving SSI or SSDI or has received a doctor’s certification that they meet the SSA definition and criteria regarding limitations
Important notes:
● The 2025 annual contribution limit is $19,000. The first $100,000 is exempt from SSI resource consideration; higher limits apply for Medicaid.
● On January 1, 2026, the disability onset age limit will rise to 46 years old.
Veterans Affairs (VA) Pension (Aid and Attendance)
Financial assistance to reimburse a wartime Veteran or surviving spouse for long-term care costs incurred as a result of disability.
Who qualifies?
Those who meet service, medical, income, asset, and transfer rules; with regard to service, Veterans need not have served in combat or have been boots on the ground; they need only to have served at least 90 days of active duty, with one day during a congressionally defined wartime period.
Important notes:
● The 2025 maximum monthly tax-free benefits for Pension with Aid and Attendance are $2,795 (married Veteran), $2,358 (single Veteran), and $1,515 (surviving spouse).
● There is a three-year prohibition on gifting.
Veterans Asset Protection Trust (VAPT)
A self-settled irrevocable trust designed to hold assets in a manner that will meet strict VA eligibility standards while providing a thorough and thoughtful final distribution of client assets.
For whom is it used?
Wartime Veterans and their spouses, particularly those with a primary residence
Important notes:
● VA rules regarding transfers are different from those for Medicaid.
● Using a VAPT is best practice for Pension with Aid and Attendance planning.
Combat-Related Special Compensation (CRSC)
Monthly support for military retirees with combat-related disabilities.
Who qualifies?
Veterans who have completed at least 20 years of military, National Guard, or Reserve service; are retired under the Temporary Early Retirement Act; are on the Temporary Disabled Retired List; or are on the Permanent Disability Retired List
Concurrent Retirement and Disability Pay (CRDP)
Financial support for military retirees with service-connected disabilities rated 50 percent or higher.
Who qualifies?
Military retirees who have completed at least 20 years of service, are eligible for military retired pay, and have a service-connected disability with at least a 50 percent rating
