Long-Term Care Insurance v. Medicaid Asset Protection Trust

Long-term care insurance (LTCI) and the Medicaid Asset Protection Trust (MAPT) are often thought of an alternatives to each other. They are not. While LTCI is both a shield and a sword, the MAPT is a shield only. LTCI protects your assets and income from the costs of care. But it has a positive effect (the sword) in that it actually pays for someone to come into your home and care for you there. The MAPT protects assets, like your home and your life savings, but it does not protect your income (pensions, social security, interest, dividends, etc.). The MAPT is solely a defensive tactic. That being said, in the event LTCI is unavailable to the client for medical or financial reasons, the MAPT is an excellent tool. There is truth in the saying that a good defense is the best offense. With the MAPT in place five years ahead of time, the client’s assets are protected and Medicaid will then pay for the cost of care. While income may be protected for community care in the home, with the pooled income trust, for institutionalized care in a facility your income is available to pay towards your care.  If you have a spouse at home, they may keep about $3,435 per month of the couple’s combined income and sometimes more, depending on whose income it is — the community spouse’s or the institutionalized spouse’s.