Understanding Medicaid Planning: How to Qualify Without Losing Everything
For many families, the rising cost of long-term care is one of the biggest financial threats they face in retirement. Nursing home care in Washington State can cost upwards of $100,000 per year—and most private insurance policies don’t cover it. That’s where Medicaid can be a vital lifeline.
But here’s the challenge: qualifying for Medicaid doesn’t happen automatically. And without careful planning, families are often forced to spend down their assets, sell property, or drain retirement accounts just to meet eligibility requirements.
The good news? With proactive legal guidance, you can qualify for Medicaid without losing everything you’ve worked a lifetime to build. The tools you can use to help are actually written in the law, but only help if you know about them.
What Is Medicaid Planning?
Medicaid planning is the process of structuring your finances and estate in a way under the rules that helps you qualify for long-term care benefits without jeopardizing your home, savings, or family’s financial security. It involves understanding state-specific rules, lookback periods, asset limits, and legal strategies to protect what matters most.
At Pettis Webber Pacific, we guide Washington families through this complex landscape—helping them create Medicaid plans that offer protection, peace of mind, and long-term support.
Common Myths About Medicaid
Before we dig into how to plan, let’s clear up a few misconceptions:
- Myth #1: I have to be completely broke to qualify.
👉 Not true. Medicaid has strict asset limits, but there are legal ways to protect significant assets through planning and exemptions which are all outlined in the law. - Myth #2: I can just give my assets to my kids.
👉 Be careful. Medicaid has a five-year “lookback” period, and improper gifting can delay eligibility, result in penalties, or even consequences for your kids. - Myth #3: I don’t need to worry about this unless I need care now.
👉 Planning ahead gives you more options and stronger protections. Waiting until a crisis hits can limit what’s possible.
Strategies That Can Help
Here are just a few of the key Medicaid planning tools and strategies we often use:
✅ Spousal Protections
If one spouse needs care and the other remains at home, Medicaid rules allow the well spouse to keep a portion of income and assets. Strategic planning can maximize these protections and help preserve the family’s financial stability.
✅ Caregiver Agreements
Paying a family member for caregiving? Putting it in writing with a formal caregiver agreement can help you comply with Medicaid rules and avoid future penalties.
✅ Spend-Down Planning
In some cases, it may make sense to spend assets in ways that don’t penalize you—such as home improvements, paying off debt, or purchasing an irrevocable funeral plan. But, you can do the spend-down strategically and in a way that sets you up better in the future.
When Should You Start Planning?
The earlier, the better. Medicaid planning done 5 years or more before care is needed offers the most flexibility and protection. But even if you’re facing an urgent situation, don’t lose hope—crisis planning is still possible, and we’ve helped many families navigate it successfully. And, don’t forget, you need to have your power of attorney in place before you have a need. Your planning options are limited if you don’t have a power of attorney, so getting a strong power of attorney in place is often one of the first steps!
We’re Here to Help
At Pettis Webber Pacific, we believe you shouldn’t have to choose between getting the care you need and protecting the life you’ve built. Medicaid planning is complex, but you don’t have to navigate it alone.
If you or a loved one are concerned about long-term care costs, reach out to schedule a consultation. We’re here to help you plan with clarity, confidence, and compassion.