You could give your assets to me, for example. They’d be secure, because I would refuse to give them back to you when you needed to pay your unscrupulous medical bills.
In that scenario you’d still owe all that money but you’d be unable to pay it having given all your assets away. On the other hand, your assets would be secure in my bank account. See dracoi’s post about the trust needing to be irrevocable and you not being a beneficiary.
That’s basically a fancy way of saying you have to actually give your assets away. If they’re still your assets, on the other hand, you can either use them to pay off your debts or not pay your debt, but the assets aren’t protected in any way.
The closest you might come would be something like robert_columbia’s scheme where you personally never owe any money, except that his plan wouldn’t work for several of the reasons he conjectured.
If the assets are yours, you’ll either have to pay the bill or lose at least some of the assets in bankruptcy. Depending on when you give the assets away or even sell them below market value , it may be considered a fraudulent conveyance which can be reversed during the bankruptcy which again will result in you losing your assets. And if you give your assets away well in advance of any medical needs, then yet again you’ve lost your assets - and even if the person you give them to is completely trustworthy there’s no guarantee that that person won’t end up in the same situation.
I'm pretty sure that there is no trust you could set up where you are the beneficiary and have any degree of control and your assets are protected from bankruptcy. Because that's really what you're talking about - you're not talking about finding an alternative way to pay your medical bills. (Medicaid) You're talking about shielding your assets from bankruptcy, whatever the reason for the bankruptcy is.
And I’m pretty sure the incorporation method you mentioned only works in one direction. I can’t lose my personal assets if my incorporated business goes bankrupt- but if I file for personal bankruptcy , my ownership of the business is a personal asset and can be liquidated as part of the bankruptcy.
As others have said, you can’t give away your stuff to protect it from Medicaid etc.; I believe the assets might also be at risk from creditors (but don’t quote me on that).
I’m not sure what would happen if the person to whom you gave the assets had already disposed of them when Medicaid came after you and that person - anyone know anything about that?
Not quite what the OP asked but there is something called a “special needs trust” where the assets are held by a trust, so the beneficiary remains eligible for assistance. My brother has one of these set up for his son (fairly severe autism); we also have one for my son (less severe autism). Obviously neither of these young men funded the trusts themselves.
I would bet that if, say, you were due to inherit a million dollars, the person leaving you the money could set up a similar trust that you didn’t control.
Retirement accounts such as 401(k) plans are generally safe from lawsuits and bankruptcy judgments. So if you can pop back in time and max all THOSE out, the funds would be safe from hospitals and doctors - though I don’t know how Medicaid plays out if you do in fact have such assets.
The out-of-network limit would be much higher than your in-network limit, at the very least; the plan might even decline to cover OON costs entirely.
For what it’s worth, in the scenario you cite, you can often negotiate a discount with an out-of-network provider. A friend was in just this situation a couple years ago: her daughter had a procedure that required sedation; the anesthesiologist, who was out of network (the office and doctor were in-network) billed them 4,000 dollars (I’ve had the same procedure and the “rack rate” is about a third of that, so it was a scam pure and simple). The anesthesiologist wound up writing off about 80% or more of the bill - quite possibly whatever amount exceeded the in-network reimbursement.
Medicaid doesn’t literally go after those assets. They simply penalize you to the extent that you gave away assets. So if you gave away $100,000 in assets 4 years and 11 months ago then apply for Medicaid, Medicaid won’t provide benefits until you’ve paid $100,000 toward your long term care after applying. Once you have, you’re eligible for Medicaid.
Notice that this creates some strange situations. In my example, if you wait 1 more month to apply, you can fill out the financial questionnaire honestly saying you haven’t given away assets within 5 years. One extra month changes your cost from $100,000 to $0. Also, it doesn’t matter if in the ensuring 4 years after your gift you spend $500,000 or a $billion on your medical care. If you apply during the lookback period you get penalized for the complete $100,000.
Without the ACA marketplace for health insurance and its prohibition about pre-existing conditions, I don’t think I would be able to buy insurance at any price.
I verified with my insurance that I do not have our of network coverage or an out of network out of pocket limitation. I also have a narrow network.
For emergency services supposedly everything is in network, but who is to say what counts as emergency. I still have a fear of what if I get surgery and an out of network practitioner works on me and I get a bill for 100k for a few hours work.
Is there supplemental health insurance I can buy for these situations? Like a 15k deductible with 100% coverage beyond that? That way in case I am screwed by an unethical doctor I won’t lose everything.
This country has serious problems. I hoped obamacare would fix issues like this. It made things better but our system is still capable of great evil.