The New Jersey Division of Consumer Affairs has issued a bulletin advising New Jersey residents of a potential for abuse by non-attorney Medicaid advisors. Medicaid is a health payment plan for needy individuals.

In order to qualify for Medicaid, an individual must have limited assets and income that is insufficient to pay for his care.  Once qualified, Medicaid will pay for many of the costs associated with long-term care.

The cost of long-term care can be significant.  For instance, a nursing home can cost anywhere from $10,000 to $14,000 per month.  An assisted living residence can cost anywhere from $4,000 to $10,000 a month, with the mean being somewhere around $7,000.  A live-in home health aide can cost anywhere from $3,500 to $6,000 per month.

With costs such as these, it is no wonder that a great many people seek professional assistance in order to qualify for Medicaid benefits.  Once qualified, Medicaid may be for many of the aforementioned costs or, at least, assist with the payment of those costs.

Qualifying for Medicaid is no simple process.  Even an individual who is truly impoverished can have legal issues for which he would benefit from competent professional advice.  An individual with assets who is seeking to preserve a portion of his assets most certainly would require the assistance of an attorney in order to accomplish his goals of asset preservation and qualification for benefits.  This process of asset preservation and qualification for Medicaid is called Medicaid planning.

Elder law attorneys are frequently the attorneys who assist clients with Medicaid planning.  As an elder law attorney, I have assisted hundreds of people in qualifying for Medicaid.

Medicaid planning involves advising clients as to how to shelter their assets through direct gifts to family members or gifts to trusts.  An elder law attorney may also give advice regarding the drafting of a last will and testament, spending down assets, and converting countable assets to non-countable assets.

There are, however, non-attorneys who assist people in qualifying for Medicaid.  The Supreme Court of New Jersey has issued an opinion holding that providing Medicaid planning advice is the practice of law.  When a non-attorney is engaged to provide these types of services, the non-attorney is engaging in the unauthorized practice of law, which is a crime.

Now the New Jersey Division of Consumer Affairs has issued a bulletin warning the public about these practices by non-attorney Medicaid advisors.  The problem is, families are often referred to non-attorney Medicaid advisors by someone they believe to be knowledgeable about the Medicaid program.  For instance, a staff member of a nursing home might refer the family to the non-attorney Medicaid advisor.

As far as the family is concerned, they are doing the right thing; they are using the organization to which the nursing home where their mom resides referred them.  In reality, though, the family is being referred to a non-attorney who cannot, by law, engage in the work they are performing and who is providing inferior advice and counsel to the family.

Ironically, these non-attorney Medicaid advisors often charge the family what an attorney would have charged.  I have met several family members who have consulted with non-attorney Medicaid advisors, and I know the fees these non-attorneys have quoted my clients.  Their fees are often the same as my fee or, sometimes, more than my fee.

Family members who engage the services of a non-attorney Medicaid advisor are often getting inferior services at a high cost, both in fees and in lost opportunities.  So, beware, if the person giving you advice about Medicaid planning isn’t an attorney, then that person is committing a crime and probably is giving you bad advice.