Medicaid's Long Term Care rules are different in every state. Eligibility for Medicaid nursing home payments depends on 50 different sets of rules, and every state has different rules for retirement savings of elderly people who need nursing home care.

In some states the rules are contained in the state laws. In many other states, the rules are written into the state’s code of agency regulations. In still other states the rules are contained in policy manuals that are written by the state’s Medicaid agency.

Click on the states listed on the map, to read about the wide variations in state Medicaid laws and rules that govern Individual Retirement Accounts and Pension plans.

In states like Florida and New York, the Medicaid rules governing IRA's and pensions vary depending on the county where the Medicaid applicant resides! In some New York Counties, regulations published in 1998 and 1999 say that the retirement funds of an individual Medicaid recipient are not countable as long as he is receiving periodic payments. County regulations published in 2006 remind case workers that the community spouse must be receiving periodic payments from the IRA. I learned about these unique rules several years ago, when it became clear that my father was going to transition from assisted living into nursing home care in New York. Most of his money was in an IRA that he had saved during many years of self employment. My father could qualify for Medicaid in New York State, as long as the annual distributions from his IRA were applied to the cost of his nursing home care. New York State does not require that the IRA be cashed out, or turned into an annuity.

In Massachusetts, the situation is much different, and much more difficult for people who have saved for retirement. The Massachusetts Medicaid agency will always consider an Individual Retirement Arrangement as a "countable asset."

Yet, the Massachusetts law does not count retirement money held by the employer of a spouse who is still working. Families and spouses are going through a time of crisis when a loved one is being admitted into a nursing home.

Here is how the patchwork of regulations covers people in Massachusetts:

Adding complicated and cumbersome financial decisions about IRA and pension savings accounts to the family’s dealings with a medical care crisis and nursing home admission makes an overwhelming situation even worse. We can advise you and your family on the best ways to preserve retirement saving. There are always alternatives to spending down assets for nursing home care. Read Our Case Summaries for Medicaid Planning After a Nursing Home Admission. Link to Audio Clip Explaining Options

There was an effort to pass a new law in Massachusetts that would grant more protection to the retirement funds of the spouse of a nursing home resident. An Act Regarding the Assets of Medical Assistance Recipients SB 540, HB 1094 was proposed in 2009 to allow the community spouses of nursing home residents to retain their IRA’s by making the IRA account a non-countable asset when their spouse needs Medicaid to cover nursing home care.

This change in the law would have saved the community spouse of a nursing home resident from having to liquidate the IRA account or transfer it into an annuity investment that may or may not be safe from financial risks. However, the Massachusetts Legislature did not act on this proposal during its 2009 - 2010 session. The proposal will have to be reintroduced in 2011.

Planning for Long Term Care must be part of every estate plan. If you do not have long term care insurance, or sufficient wealth to generate income that will pay for long term care, your potential need for Medicaid coverage must be considered when you plan the ownership and succession of your assets. We carefully consider this potential need for long term care, along with all of the other elements of your estate plan.