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Medicaid Planners Find Huge Advantage in Becoming a CMP™

If you haven’t heard about the Certified Medicaid Planner™ designation by now, it’s one of the fastest growing accredited designations in the country.

The focus of the CMP™ designation is to demonstrate a planners’ high skill and experience in Medicaid Planning, as well as a planner’s commitment to both high standards and high ethics. The CMP™ Governing Board was established nearly a decade ago to help set standards in the field of Medicaid Planning and devise a testing system to validate skill in the field. No other multi-discipline organization is committed to this goal.

Medicaid Planning is a growing practice area for law firms and financial advisors who are committed to helping clients navigate the long-term care spenddown. Much like the US Tax Code, the Medicaid Code is complex and difficult for most seniors to understand. A Certified Medicaid Planner has demonstrated the proven skill to help clients like that with a deep understanding of the complexity of these rules and their practical application.

Families are often dealing with the Medicaid spenddown at the same time as a crisis health care situation that caused the loved one to enter the nursing home. With the high cost of care, a Medicaid Planner’s role is vital to ensuring that the patient does not spend more on the cost of car than the law requires.

The high cost of long-term care is the single biggest risk to retirement assets ever in the history of the United States. Uninsured patients needing long-term care services are unable to get the financial help they need without relying on the Medicaid system. Advanced Medicaid Planning will always maximize savings for the patient and his or her spouse, making the work of the Certified Medicaid Planner™ invaluable and providing the planner and the planner’s clients with a huge advantage.

If you want to learn more about becoming a CMP or how certification will help you, join us April 9, 2019 at 3:00 pm for a 30-minute FREE webinar. Click on the following link to sign up:

CLICK HERE TO REGISTER FOR FREE WEBINAR

Seats Still Available for Upcoming Medicaid Planning Courses

If you missed the recent Medicaid Planning course in Las Vegas, you have several opportunities coming up to learn Medicaid Planning. The Nuts & Bolts of Medicaid Planning course is the most comprehensive course on Medicaid Planning ever developed and designed to help any professional advisor add Medicaid Planning to your practice.

This course, taught by one of the leading long-term care Medicaid Planning experts in the country, will give you the insight you need to add Medicaid Planning to your practice or help solidify your Medicaid Planning skills. With the growing number of seniors needing long-term care, you need to know this material to be an effective estate or asset protection planner.

The course has become a hit among estate planning law firms wanting to grow their practice and service aging clients though the addition of Medicaid Planning services. In addition to a powerhouse 2-days of Medicaid Planning immersion, the course is approved for 9 credit hours of continuing legal education.

The small-group intensive format allows for interaction with the presenter.

If you were unable to attend the Las Vegas course, there are other upcoming courses available that may fit your schedule even better:

Cleveland, OH June 6-7, 2019

San Diego, CA July 22-23, 2019

Los Angeles, CA September 24-25, 2019

Washington, DC October 10-11, 2019

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Congress Missed Deadline to Extend Medicaid Spousal Impoverishment Protections

When married couples seek home care paid for through Medicaid, each state runs a Home and Community Based Services (HCBS) program that provides coverage. Prior to the enactment of the Affordable Care Act (ACA), there was no uniformity among the states as to whether to apply the traditional spousal impoverishment rules for nursing home Medicaid to HCBS Medicaid. Spousal impoverishment protections allow for the protection of resources and income for the benefit of the well spouse safe from contribution towards the infirmed spouse’s cost of care.

The ACA rectified that problem and mandated that all states apply the spousal impoverishment protections of the long-term care institutional Medicaid program to the HCBS home care programs. The only catch, it contained a sunset clause that expired on December 31, 2018.

Congress put a temporary band-aid over this problem at the end of the year with a 3-month extension signed by President Trump. This was done in an effort to give Congress the time to debate and deliberate on a permanent extension.

The temporary extension ran out a few days ago on March 31, 2019. Without additional congressional action, the provision sunsets and states will be able to ignore spousal impoverishment protections for tens of thousands of married seniors receiving HCBS care, potentially exposing considerable amounts of community spouse assets to depletion or forcing seniors to move from home into skilled nursing homes where the spousal impoverishment protections are absolute.

A bipartisan bill introduced by Michigan Reps. Debbie Dingell (D-MI) and Fred Upton (R-MI), would be a permanent solution to this problem. The Protecting Married Seniors from Impoverishment Act has not yet received an up or down floor vote in the US House. We will be keeping close tabs on this and looking to see if states start taking liberty with home care eligibility requirements.

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Free 2019 Medicaid Planning Desk Reference

Get Up To Date With New 2019 Medicaid Numbers

The Centers for Medicare and Medicaid Services (CMS) have issued new annual spousal impoverishment figures for 2019.  You can download a complimentary FREE 2019 Medicaid Planning Desk Reference.   The full numbers are contained in the Desk Reference, which you can download for free by clicking the link at the bottom of this article.

Here is a quick recap of the new figures and what they mean:

2019 ASSET LIMITS

The New minimum Community Spousal Resource Allowance (CSRA) is $25,284. The new maximum CSRA is $126,420.

To get your FREE 2019 Medicaid Planning Desk Reference, click here.

Reminder, in the straight deduction states like Florida and California the Max CSRA is the pure asset cap.  Any asset amount below that is sufficient to qualify for long-term care Medicaid.  For example, if a couple has $100,000 in countable assets, then in the straight deduction states they do not need to spend down any further.  Also, in straight deduction states the minimum CSRA is never a factor in planning.

In the one-half deduction states like Michigan, Pennsylvania, Kansas and Ohio, the minimum and maximums CSRA limits are both used.  For example, take the couple with the $100,000 in resources on the “snapshot” date (i.e., the date of admission to the nursing home or the hospital when the state requires a valuation of all assets available by the couple for the spenddown).  In a one-half deduction state, the CSRA calculation would assess one-half of the total countable resources as the CSRA.  Take total countable resources of $100,000 and divide by 2 to yield the CSRA of $50,000.

Where the maximum is used in a one-half deduction state is when the countable resources exceed twice the maximum.  For instance, a couple with $300,000 would only be able to set aside $126,420 for the CSRA.  The remaining assets would be exposed to the Medicaid spenddown.

The minimum CSRA is a floor and only factors in when one-half of the total amount of countable assets falls below the minimum threshold.  For example, if a couple has $40,000, then the CSRA would not be $20,000 because that’s below the minimum.  The CSRA in that case would default to the new minimum $25,284.

Also note: In most states the new CSRA limits apply to snapshot dates in 2019 only. Typically, if an applicant’s snapshot date is 2018 but they apply in 2019, the CSRA amount will be based on the CSRA for snapshot date in 2018 and not the application date of 2019.  If you are looking for a prior year’s CSRA limits, please contact our office and we can help you locate the appropriate and applicable CSRA limit.

2019 INCOME LIMITS

The Minimum Monthly Maintenance Needs Allowance (MMMNA) is $2,057.50 (for all states except Alaska and Hawaii).  The new maximum amount is $3,160.50.  These allowance limits are set mid-year and these numbers remain in effect until July 1, 2019.  This figure is used as part of a formula to determine how much of the patient’s income a community spouse can keep to live on.

The new Community Spouse Monthly Housing Allowance is $617.25 (for all states except Alaska and Hawaii).  This figure factors into the spousal allowance formula to determine if excess shelter expenses can be used to boost the MMMNA.   For example, if the community spouse has a large rent or mortgage payment or is in independent or assisted living, the excess costs for shelter can allow the community spouse to keep more of the institutional spouse’s income to help cover the expenses.  Like the MMMNA, this number also changes mid-year and remains in effect until July 1, 2019.

2019 HOME EQUITY LIMITS

The new minimum Home Equity Limit is $585,000.00.  In the handful of states that have adopted an upper limit, that amount is $878,000.00 for 2019.  NOTE: This limit does not apply if the patient is married; but if the community spouse dies and the home automatically becomes owned by the patient spouse as a result of joint ownership on the deed, it could cause the patient to become ineligible for Medicaid.

ADDITIONAL INFORMATION

If you want more information on how to calculate the CSRA or how to maximize the conversion of excess assets to income you should consider purchasing the Medicaid Planning Guidebook or taking the Medicaid Planning Course. We provide a full range of support for advisors of all varieties to assist with their Medicaid Planning cases, including advisor mentoring and case design services.  We also have live training courses coming up that will enable you to add long-term care Medicaid Planning to your practice.  Make 2019 a more profitable year by helping your clients long-term care Medicaid eligibility and asset protection – we’ll show you the way!

FREE DOWNLOAD

To get your FREE 2019 Medicaid Planning Desk Reference, click here.

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Interest in Certified Medicaid Planner Designation Grows as VA Benefit Rules Get More Strict

For nearly the past decade, the Certified Medicaid Planner designation has been awarded to competent advisors seeking to set themselves apart in the planning field as the best of the best. Interest in this designation has grown substantially in the last few weeks, partly as a result of new rules issued by the Veterans Administration (“VA”).

The new VA rules greatly impinge upon the ability of veterans to get the VA Improved Pension, also referred to commonly as the VA Aid & Attendance benefit. This is a little-known benefit that can be used to help pay for care at home, in a nursing home or in an assisted living facility. While the benefit is typically not as hefty as Medicaid’s assistance, it is paid to the claimant a cash payment. The claimant can be the veteran, the veteran’s spouse, or the veteran’s widow, provided that the veteran served during a period of wartime. The benefit is means tested, but until recently it was rather easy to reposition assets to qualify.

Much like the evolution of Medicaid eligibility over the years, the VA has moved to further restrict access to the benefit by punishing those who give away assets to qualify. Medicaid has had some version of this since the late 80’s when it started with a 30-month lookback, then moved to a 36-month lookback in in the 90’s and eventually to a 60-month lookback in 2006. The VA is attempting to mimic Medicaid in several aspects by adopting a 36-month lookback on asset transfers, but starting the penalty the month after a transfer is made. It has also taken the Medicaid’s maximum protected amount for community spouses and adopted that as a bright-line asset test for applicants, currently $123,600.

The complexity of the new eligibility requirements will mean that fewer veterans and their families will be able to tap the benefit. For planners, it will drive some out of the business similar to how restrictive rules did with Medicaid planners years ago. Those who choose to continue on with VA benefit planning will need to learn the new rules and start thinking like a Medicaid planner.

For some, it has meant to move their practices into Medicaid planning. In the last few weeks, the CMP Governing Board has seen a sizable uptick in interest with many advisors active in the VA benefit arena looking to grow their businesses by adding Medicaid planning. We have resources that can help you add Medicaid planning to your practice, including the largest textbook ever written on the subject, online and in-person educational programs that are second to none, real-time practice mentoring and case development, and back-office Medicaid application services to support your practice. Many planners choose to enhance their practice by getting the nationally-accredited Certified Medicaid Planner designation.

To learn more about the CMP designation, click here for a free download of the “How to Become a CMP” brochure.

 

 

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More States Request End to Retroactive Medicaid Coverage

Medicaid, as a general rule, will allow for coverage for up to 3 months prior to the month of the application. The applicant would have to have been otherwise eligible in those prior months and just not have filed the application.

This is helpful for many families who seek Medicaid coverage for outstanding medical bills under the general health insurance side of Medicaid. It is also helpful for those who are in nursing homes because many, especially those cases with a community spouse, do not realize that they have overspent blow the asset limit and can oftentimes file for Medicaid several months after they have become financially eligible.

In a move to find ways for states to reduce their coverage and costs under the Medicaid program without legislation, the Centers for Medicare and Medicaid Services (“CMS”) are encouraging and allowing the approval of a waiver of the retroactive Medicaid coverage rule. This allows states to apply to CMS for approval to stop providing coverage during that 3-month period immediately preceding the Medicaid application.

Several states have taken advantage of this, including Florida, Indiana, Arizona, Arkansas, Kentucky (which is tied up in court), New Mexico, and New Hampshire. Arkansas, Indiana and New Hampshire only apply to adults who have gained health insurance under the ACA’s Medicaid expansion, while the other states eliminate retroactive coverage for all programs, including the long-term care program.

The most common usage for retroactive coverage in the long-term care application process is usually to make up for poor processing of applications. For instance, if an applicant applies for nursing home Medicaid coverage and 2 months into the process they get an improper denial for whatever reason, they have 2 choices: request a fair hearing which could take months or refile the application and reopen the file. The later choice is typically the most expedient even though it requires abandoning the previous application date. The 2 intervening months are typically just covered under the retroactive coverage and this can get an approval without the high cost and delay associated with a fair hearing.

For those in states that eliminate retroactive coverage, that process is no longer available. This will force more applicants into fair hearings that would otherwise be unnecessary. Applicants facing back medical bills for long-term care will have to utilize a little-known provision that allows for the allocation of future monthly nursing home co-pays towards pre-eligibility medical bills. This works well, but can usually only be implemented after Medicaid is approved.

Each month instead of paying the monthly liability to the nursing home, the patient’s income is used to satisfy outstanding medical bills – even the back balance at the nursing home. That at least gives those without retroactive coverage some backup plan to cover high bills incurred prior to the actual application, but does nothing to help community spouses recoup money they spent after they became financial eligible.

This also means that more people should seek assistance when filing their Medicaid application. Help with an application can avoid the need to have to re-file because a novice makes a mistake during the application process. Those mistakes can be costly and can be avoided with expert help to guide the applicant.

 

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Beat the Medicaid Income Limit: Can a Miller Trust Help Your Clients with Medicaid Eligibility?

In the world of long-term care Medicaid, a nursing home patient can get assistance if they meet certain basic eligibility requirements. One of the most confusing requirements is the income limit.

In essence every state imposes an income limit. In the majority of the states, the basic premise is that the nursing home patient doesn’t have enough monthly income to cover the cost of care. If you have enough income each month to pay the nursing home, you don’t need or qualify for assistance. If you don’t and you meet all the other eligibility requirements (i.e., your assets are spent down below the state reserve limit) then you can get help.

There are a certain number of states that use an income limit much lower than the cost of care. These are known as “income cap” states. In an income cap state, if the applicant’s income exceeds the state income limit for Medicaid, they are automatically disqualified and cannot get Medicaid to help pay for their long-term care expenses, even if they are completely broke and do not have enough income to cover those expenses directly.

The state income cap is set at 300% of the federal poverty income. For 2018 this amount is $2,250. In every state with an income cap, the cost of a nursing home is more than double (and in most cases more than triple) the state income cap.

Many seniors have incomes that exceed the income cap, but do not have enough income to cover the cost of a nursing home once they have depleted all other resources. Fortunately, there is a way to beat the Medicaid income cap!

Federal laws on the creation of trusts under Medicaid allow for defeating the income cap for everyone and here is how it’s done.

There is a special type of trust formally called a “Qualified Income Trust.” Most states do not use that term. Instead it is known as either and “Income Cap Trust” or a “Miller Trust.” The later name as a result of a court case in Colorado (Miller v. Ibarra) that established the right of Medicaid applicants to use the trust as a way to overcome the limitations imposed by a state income cap when faced with the high cost of long-term care.

The biggest problem with the Income Cap Trust is that most people don’t know they exist or how they are used. This was highlighted recently when I received a question from someone who asked what other help they could get with nursing home expenses since they didn’t qualify for Medicaid because their income was too high. They had never heard of an income cap trust. Once they learned about what it was, they wished that they had learned about it when the couple had spent down enough to be asset-eligible for Medicaid.

How the income cap trust works, depends on the state in which you use it. All follow a basic format for their trusts and nearly all states provide a template form for Medicaid applicants to use to create the trust. They are typically 3 or 4 pages in length. Once the trust is executed, the trustee of the trust creates a trust checking account where funds can be deposited. Whoever is in charge of the patient’s finances either takes income from the patient’s regular checking account and deposits it into the trust or arranges to have the source of income (i.e., Social Security check, pension, etc.) directly deposited into the income cap trust.

In most states, you must only put the amount of income that exceeds the income cap into the trust. For example, if the Medicaid applicant has $2,750 a month in income, they would need to contribute the difference between the income cap and the monthly income to the trust. After the applicant deposits $500 into the trust, the applicant is considered “income eligible” for Medicaid. Alternately, in a state like Arkansas, they require that all of the applicant’s income be placed into the trust.

Ultimately, the funds in the trust are spent on the patient’s monthly share of cost or diverted to the patient’s spouse as part of the family allowance, the same as in non-income cap trust states. While it’s more work to achieve Medicaid eligibility, the good news is that the income cap is truly nothing more than a harmless scarecrow only meant to make you think you can’t get help when you really can.

If you want to be a savvy advisor, consider learning the subject of Medicaid Planning trough our upcoming Continuing Legal Education course. For more information, click here.

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Trump’s Proposed Medicaid Cuts Make Little Sense

President Trump released a budget. Fortunately in a system of checks and balances, presidential budgets do not amount to much more than a partisan wish list and likely never get enacted. The one thing a budget proposal does is give a sense of what the executive branch is thinking and when it comes to trimming Medicaid, whoever is planning the President’s budget clearly does not have a good grasp on the reality of the situation.

Long-term care Medicaid is essentially broken down into two types of programs. The first program is skilled care in a nursing home, which is considered the core need for long-term care. If you cut this program it looks like you are trying to kick grandma out onto the street and that is just bad optics for any politician.

The second program is based around nursing home alternatives and collectively called Home and Community Based Services (HCBS). These programs vary state to state and include help with home care and some assisted living. When looking at ways to trim budgets, HCBS can be seen by some as the way to reduce the government’s outlay without the perception that you’re booting anyone from a nursing home. Fewer people getting home care puts a strain on individuals and families, but the optics are far less damaging.

In the latest budget proposal, cuts to HCBS care would likely reduce dramatically the availability of HCBS care across the country. This is what happens when you create budgets without a practical understanding of how the system works. Cuts to HCBS programs will likely blow the budget up because it will drive more people from their homes into nursing homes. Caring for someone in a nursing home is typically dramatically more expensive than home care or assisted living depending on the patient’s level of care.

HCBS programs were typically developed as cost-savings mechanisms. States like Ohio have used them effectively to transition people from nursing homes back home with huge cost savings. But states like New York which let patients get up to 24-hour skilled care at home through its Managed Care program are less efficient in saving the state money. Cuts without program reforms, however, would likely lead to a massive transition of patients from less-costly HCBS programs into nursing homes and do exactly the opposite of what the budget wonks in Washington think will happen when they cut those program.

People relying on HCBS care to avoid nursing home institutionalization can only take solace at this point that a presidential budget never gets enacted in its proposed form and seldom do presidents get what they ask for. One can only pray the logic that goes into the final budget-making process is not so short sighted.

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Over one-third of Americans think Medicare will pay for their LTC costs

In my Guidebook on Medicaid I write about the Medicare myth. What is the Medicare myth? It’s the mistaken belief by people that Medicare will pay for their long-term care expenses in retirement. Until now, I haven’t seen a good report on how pervasive this myth is.

The AP-NORC Center at the University of Chicago conducted an extensive poll of adults over 40 on numerous long-term care issues. This poll quantifies how large the Medicare myth is in the US. Nearly 4 in 10 people surveyed mistakenly believe that Medicare will cover their long-term care costs.

Medicare has a very limited role in the payment of nursing home costs. It typically only covers a portion of a rehabilitation stay when followed by spending at least two midnights in the hospital before discharge to the nursing home. Medicare pays full price for 20 days of care and then a co-pay for the next 80 days that is typically shared with the patient or their Medicare supplement policy. After 100 days of coverage, Medicare abandons the patient financially and forces them to spenddown to Medicaid levels.

While Medicare does cover some cost of this 100 days of nursing home rehabilitation care, 100 days is not considered long-term. Therefore, Medicare does not cover long-term care. Yet over one-third of the population erroneously thinks that Medicare will take care of their long-term care costs. The Medicare myth prevails large.

The existence of the myth being so widespread lends itself to problems and opportunities.

The biggest problem that it creates is the lack of understanding why planning for long-term care is important. A lack of understanding leads to a lack of motivation. If a person thinks they’re covered, why would they need to do any planning? Planning could come in the form of buying long-term care insurance, but when over a third of the population does not see the insurance as being necessary, there’s no motivation to buy it when they’re healthy enough to qualify for it.

Most people only want the insurance when they realize they need it and realize they might use it someday, something many people don’t want to think about until they’ve already been diagnosed with something that makes them ineligible. When looking at long-term care insurance, the largest reason aside from price that people who want a policy do not have one is the strict underwriting criteria that makes them ineligible to get it.

If over one-third of the population is mistaken about Medicare’s ability to pay for long-term care, there’s a clear opportunity to educate. For anyone in the financial and legal world with solutions, this is a clear opportunity. Educating the public through outreach, public workshops, articles and the like can increase awareness and help change mindsets for such a large population segment that clearly should be planning. This will allow advisors who have valid solutions like long-term care insurance, hybrid long-term care annuities, and advanced Medicaid Planning solutions to begin to solve problems for a large segment of society that needs to be educated on the subject matter.

 

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Ohio Gets in Line with Medicaid Annuities (Finally!)

Ohio is always one of those states that always gets a lot of attention. Be it an election year where the fate of a nation rests on the turnout of the Eastern Appalachia states or in the sports world where everyone wonders what the [Insert Your Favorite or Least Favorite Ohio Sports Team Here] is going to do this season. When it comes to Medicaid planning in Ohio, this trend continues.

Ohio had been resistant to Medicaid safe harbor annuities in a rather unique way. The Ohio Department of Medicaid had attempted to extrapolate the post-eligibility community spouse transfer rules on to pre-eligibility Medicaid purchases. [Note: Post-eligibility transfer rules are the rules that require a community spouse to re-title jointly held assets into the community spouse’s name if those assets make up the Community Spouse Resource Allowance.] Because the community spouse’s resource allowance is limited to the maximum set by CMS each year ($119,220 for 2016), the state would limit the amount of an annuity a community spouse could purchase to the same amount. Purchases larger than that caused the applicant to receive a transfer penalty for any portion of the annuity purchase that exceeded that amount.

The Hughes opinion also decided that a state need not be named as a beneficiary of a community spouse’s annuity.

Ohio became the only state to put a lid on how much money you could put in a safe harbor annuity, violating its citizens’ rights by making it harder to be considered Medicaid eligible in Ohio than in any other state when purchasing an annuity. This was successfully challenged and taken all the way to the U.S. Supreme Court which let the favorable 2013 Sixth Circuit Ruling stand.[1]

The Hughes opinion also decided that a state need not be named as a beneficiary of a community spouse’s annuity. Shortly after the opinion was issued, other states started to take heed and change their rules. Michigan and Arkansas proactively adopted the Hughes ruling in their state Medicaid rules. But even with all of that, Ohio dragged its feet. The Ohio Department of Medicaid refused to change its rules and continued to penalize annuities; in some cases, even small annuities. This left families with no choice but to petition a federal judge in order to get their Medicaid benefits. A federal judge in Cincinnati even threatened to remove Ohio from the Medicaid system entirely if the state didn’t grant eligibility to applicants who had been improperly penalized from the purchase of a safe harbor annuity purchase. [2]

In a Medicaid Eligibility Procedure Letter dated February 26, 2016, the Ohio Department of Medicaid changed its rule to come into line with the part of the Hughes decision that explicitly stated there was no limit to the amount of pre-eligibility Medicaid safe harbor annuity purchases. Ohio is still requiring the state be named as a beneficiary in the correct position for both institutional spouse and community spouse annuity purchases.

Medicaid planners in Ohio thought annuities would be considered a viable planning tool after Hughes only to find out that using the annuity required additional litigation to get Medicaid eligibility approved. Many of them had to look at alternate planning options or risk the need for federal litigation if an annuity was involved. Medicaid planners in Ohio breathed a collective sigh of relief when the new rule change was announced. This will give Medicaid planners the same type of Medicaid planning tools available across the country.

To that, I say: It’s about time!

[1] Hughes v. McCarthy, 734 f.3d 473 (6th Cir. 2013).

[2] Wagner et al v. McCarthy, Case No. 1:14cv00648 (UD Dist. Ct. Ohio S. West Div.).

[3] Medicaid Eligibility Procedure Letter No. 112.

 

Third Edition of the Medicaid Planning Guidebook now available

medicaid guidebook-283The new edition of the Medicaid Planning Guidebook is available for sale. The best book on Mediciad Planning is now even better. After a full redesign and revision of the Guidebook, the Third Edition includes:

  • 25% more material
  • Over 1300 citations
  • Updated 2016 figures
  • State-specific rule exceptions
  • Expanded discussion of safe harbor annuities an VA benefit coordination
  • Numerous practice tips and practical examples

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