When it comes to navigating Medicaid’s rules and regulations, many seniors and their families find the process confusing, frustrating and stressful. The application process is one of the biggest hurdles that families face, and with regulations varying by state, it can be difficult to even know if you’re eligible.
According to Stuart Furman, Esq. an elder law attorney in California for over 35 years and author of the award-winning “ElderCare Ready Book” and “ElderCare Ready Pack,” it’s critical to know whether your assets will put you over your state’s exemption limit. If they do, then you’ll need your attorney to help you set up your estate in a way that strategically plans for a future Medicaid application.
Do Your Assets Put You Over the Exemption Limit?
“Your assets drive the Medicaid application and approval process and it depends whether the Medicaid applicant is married or single,” Furman explains, “so the planning is finding the “sweet spot” which minimizes the spending of resources and maximizes the Medicaid payments,” he says. “For example, in some cases it may be better to claim more income for the Medicaid recipient knowing it will be part of the co-payment in exchange for allowing more resources be kept for the spouse. Sometimes you need to adjust income to minimize your overall expenditures.”
An elder law attorney like Furman knows the complications and pitfalls surrounding Medicaid, many of which are state specific. For instance:
You can’t exceed the asset limit in your state, but if you properly place your assets in a Medicaid Planning type estate plan, then you’ll be able to better navigate the qualifying and application process.
Medicaid is a complicated system and planning for Medicaid needs to be specific to individual situations, so it’s something that you should talk to an elder law attorney about well before it’s time to apply. You should also see your elder law attorney while you are mentally competent to set up proper Medicaid type estate planning vehicles. Since you do not know if or when a catastrophic health care event will occur, the time to see an elder law attorney is now.
How a Small Error on Your Application Can Have a Major Impact When Navigating Medicaid
The Medicaid application itself is tricky and it’s easy to make simple mistakes that have serious implications.
For example, in California, your house is exempt if you “intend to return home.” Your intention about returning home is completely subjective, so when the application asks if you intend to return home, the answer should always be yes, even if objectively you will not be, otherwise the home will not be exempt and thus a countable resource, Furman warns.
Other common roadblocks that can cause trouble on your Medicaid application include:
- Becoming a co-owner on your child’s home to help them qualify for their home loan
- Having made gifts to family members
- Not being aware of all your assets and reporting them incorrectly
- Not creating proper trusts
- Not having effective Powers of Attorney, with the necessary authority, if you’re applying on behalf of a parent
- Not knowing the necessary asset and income information, or where to find that information, if you’re applying on behalf of a parent
Some potential issues that could jeopardize your existing Medicaid coverage include:
- Leaving the long-term care community to go home, or to the hospital
- Moving from a long-term care community in one state to another
- Not completing the re-certification application properly (you must fill this out every year as Medicaid looks for any new assets and income)
- Making a false claim on your application (even if it’s unintentional)
- Not being aware of changes to Medicaid
So, Where Do You Go for Help?
Be cautious when looking to Medicaid for advice, Furman warns. “The government doesn’t give legal advice, so don’t rely on them. Also, the government representatives often do not understand their own rules as well as the private sector.”
Nursing homes and hospital staff are also not always equipped to offer the detailed advice that many seniors need, plus they may be guided by their own interests. Hospitals are looking to discharge patients quickly and nursing homes want to maximize the private pay they receive, Furman says.
An elder law attorney can help you navigate Medicaid, but you want to see them while you are mentally competent to establish a Medicaid type estate plan, and well before you plan to apply for Medicaid to facilitate approval to ensure you haven’t done anything that could jeopardize a future application (like making a gift to a relative which could be considered a disqualifying transfer and thus causing a period of disqualification when you need Medicaid).
Have you already completed a Medicaid application and been denied? It could be worth it to talk to an elder law attorney about your application. They may be able to file an appeal on your behalf, or re-apply for you.
In addition to seeing an elder law attorney, visit A Place For Mom’s directory on state Medicare websites. There are also a few online resources that Furman recommends visiting for more information, including:
- A Place for Mom
- NAELA (The National Academy of Elder Law Attorneys)
- For California residents: CANHR (The California Advocates for Nursing Home Reform)
What have you found most confusing or difficult about the Medicaid process? We’d love to hear your experiences in the comments below.
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