Crisis Planning
Most families come to Medicaid planning the same way: a parent has just been hospitalized, a discharge planner is asking about long-term care, and the phrase “spend down to $2,400” has just been said out loud for the first time. The instinct is to assume it’s too late to do anything but liquidate everything. It usually isn’t — but the strategies available in a crisis are different from the ones available years in advance, and the window to use them is measured in days and weeks, not months.
“Crisis planning” simply means Medicaid planning done at or near the point of need, rather than five or more years ahead of it. It cannot undo transfers already penalized by the look-back period, and it cannot manufacture time that has already passed. What it can do is make precise, legally sound use of exemptions, spend-down strategies, and specific transfer rules that remain available even after a hospitalization has already occurred.
TIMING MATTERS
TIMING MATTERS
Pennsylvania’s Medicaid program applies a five-year look-back period, examining asset transfers made in the sixty months before an application to determine whether a penalty period applies. Planning done five or more years in advance — most commonly through a Medicaid Asset Protection Trust — avoids that penalty entirely. Planning done at the point of crisis cannot use that particular tool the same way, because the five-year clock hasn’t run. But a narrower set of strategies remains fully available: certain transfers to a spouse are exempt from any penalty regardless of timing, converting countable cash into exempt assets (such as necessary home modifications or prepaid funeral arrangements) doesn’t trigger a penalty, and specific spend-down structures can be used to accelerate eligibility without giving assets away outright. See our Medicaid Spend-Down Strategies page for detail on these tools.
SPEND-DOWN PLANNING
A living will is not a general substitute for a healthcare power of attorney. It applies to the specific circumstances it defines — usually permanent unconsciousness or a terminal diagnosis — and says nothing about the countless other medical decisions that might arise in a serious but non-terminal illness or injury.
Done correctly, this reduces countable assets to Medicaid's limit while preserving real value for the family, rather than simply handing that value to a facility.
SPEND-DOWN
CRISIS CONSULTATION
Review the full asset picture — what's countable, what's already exempt, and what can be converted
Calculate the Community Spouse Resource Allowance if a spouse remains at home
Identify any prior transfers that may trigger a look-back penalty, and calculate the exact penalty period if one applies
Structure remaining assets to accelerate eligibility while preserving the maximum value for the family
Prepare and file the Medicaid application itself, which is far more detail-sensitive than most families expect — a single missing document or misclassified asset can delay approval for months
Advance planning — primarily through a Medicaid Asset Protection Trust — can shield assets from Medicaid counting entirely, once the five-year look-back period has passed. Crisis planning works within a shorter timeline using different tools: spend-down conversion, spousal allowances, and exemption planning. Both aim at the same goal; they simply use different instruments depending on how much time is available.
A WORD ON DIY WILLS
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