Preparing for the Unexpected: What Medicaid Crisis Strategies Teach Us About Longevity and Peace of Mind

By Sara V. Solano, CRPC®, BFA™

LodeStar Advisory Group LLC

Living Longer Means Planning Deeper

We’re living longer than ever before — and that’s a gift. But with longer lives come more transitions, more health decisions, and more complexity. Planning for retirement today means planning not just for income, but for longevity — for the many chapters that come after full-time work ends.

And with that longevity comes a new kind of question:

What if I need care I didn’t expect?

These aren’t easy conversations. But they’re essential to building financial strategies that feel as good emotionally as they are sound financially.

Why Preparation Beats Prediction

Behavioral finance teaches us that uncertainty is often more stressful than the event itself. When we don't know what’s coming, our minds rush to fill the gap. We worry. We imagine worst-case scenarios. And if we’re not careful, we confuse that worry for action.

But preparation is not about predicting. It’s about creating a plan that holds up — even when life doesn’t follow the script.

For those thinking ahead, the right time to talk about long-term care isn’t when it’s needed — it’s long before. That doesn’t mean you’ll face it. It means that if you do, your family isn’t left scrambling. Your values and preferences can guide decisions. And your plan won’t need to be rewritten under pressure.

A Real-World Lesson: Medicaid Crisis Planning

When someone needs long-term care suddenly — whether from illness, injury, or cognitive decline — and no plan is in place, they may find themselves navigating the Medicaid system. Medicaid is a joint federal and state program that helps cover long-term care for those who meet strict income and asset requirements.

In most states:

• Individuals may keep just $2,000 in countable assets

• A spouse can retain up to $157,920 under the Community Spouse Resource Allowance

• Income caps may apply (often ~$2,900/month)

• Gifting rules include a 5-year lookback period, with penalties for transfers below market value

Medicaid crisis planning is a strategy used when care is needed now. One commonly used tool is the Medicaid Compliant Annuity (MCA) — a specialized immediate annuity that helps preserve assets while converting them into income, which may be treated differently for eligibility.

These strategies are complex and highly situational. But they reveal something important:

Even in a crisis, a plan can soften the impact.

Planning Ahead Reduces Emotional Burden

One of the biggest sources of financial stress is being forced into decisions during moments of fear or urgency. That’s why at LodeStar, we focus on helping clients build plans that are resilient — not just in the market, but in life.

Longevity planning doesn’t mean assuming the worst. It means asking:

• What happens if I need help someday?

• Will my plan support my spouse?

• Are my values reflected in how I’d like to be  cared for?

These are not just financial questions — they’re emotional ones. And having answers makes all the difference.

Final Thought

Understanding programs like Medicaid isn’t about assuming you’ll need them. It’s about recognizing how important preparation truly is. Because when the future brings something unexpected — whether it's a health event, a care need, or a family decision — the best gift you can give yourself is a plan that’s already in place.

You don’t need to predict the storm. 

You just need a plan strong enough to weather it.

 _________________________________________________________________________________Sara V. Solano, CRPC®,  BFA™  is a Wealth Advisor who specializes in providing behavioral financial advice.

Disclosure: LodeStar Advisory Group LLC is an independent Registered Investment Adviser (RIA) headquartered in Naples, Florida. The above commentary does not constitute individual investment advice. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.