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What Are The Top 5 Medicaid Myths?

3 minute readLast updated December 19, 2023
fact checkedon December 19, 2023
Written by Deb Hipp
Reviewed by Denise Lettau, J.D., wealth management specialistAttorney Denise Lettau has over 15 years of experience in the wealth management industry.
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Are you worried that you’ll have to sell everything you own before you or a senior loved one can qualify for Medicaid? Maybe someone told you to not bother applying for Medicaid because you own an expensive home and won’t be eligible. Or, maybe you’re leaving it to the government to sort Medicaid out for you and your family. If you’re relying on friends and relatives for Medicaid advice and information, you’re probably getting a lot of misinformation. Read on for the most common Medicaid myths to see how they can affect your or a loved one’s care.

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Key Takeaways

  1. Medicaid myths are prevalent in society. It’s important to understand the facts about Medicaid.
  2. There are often myths related to income and assets. Certain types of income and assets are not counted as part of Medicaid eligibility.
  3. For most people, it’s important to plan ahead for Medicaid. An elder law attorney or other expert may be able to help you develop a plan that fits your needs.
  4. Don’t make assumptions based on word of mouth. Your situation is likely unique when it comes to Medicaid eligibility.

Myth 1: I can’t keep my income if my spouse is receiving Medicaid.

While it’s true that one spouse’s assets – money and property – will count towards the other spouse’s Medicaid eligibility, income is generally treated separately, says Abigail Wolf, an elder law attorney at the Elder & Disability Law Center.

Many states go by the “name on the check” rule, which means they only count the applicant spouse’s income toward eligibility. Examples of income include pension and social security.

“Typically, most of the applicant spouse’s income will be paid to the nursing home as a contribution to the cost of care,” says Wolf. “In some cases, a non-applicant spouse will qualify for an income allowance from the applicant spouse’s income.”

Myth 2: I don’t need to worry about Medicaid planning.

This is not true – many people can potentially benefit from planning for Medicaid in advance. An elder law attorney can assess your entire financial picture, figure out what you or a loved one can keep and then determine how to best utilize funds over the countable asset limit. This can possibly save you money that you might otherwise spend on a nursing home later as Medicaid generally covers nursing home expenses for eligible individuals.

“The earlier people come to us, the more planning options we have available to use,” says Wolf. “It’s important that people realize how costly long-term care can be and the sooner we can qualify them for Medicaid, the more money we can protect.”

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Myth 3: I know all about Medicaid from my friend’s experience.

This is not accurate. People’s experiences with Medicaid can vary greatly based on their unique circumstances. For example, your friend in another state is subject to state-specific Medicaid rules that may be different from those in your own state. Even your neighbor usually has a different situation than you or a spouse.

“People will come and sit with me and tell me, ‘I don’t want Medicaid because my neighbor told me that my father or husband won’t qualify,’” says Jeffrey Asher, an elder law attorney at the Law Offices of Jeffrey A. Asher, PC. “The uninformed neighbor is the Medicaid applicant’s worst enemy.”

A person’s ability to qualify for Medicaid benefits may depend on their age, their income, the level of care needed, what assets they own, where they live and whether they are married, says Asher. “All of these things are factors in the planning process that differ from person to person and family to family.”

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Myth 4: I must get rid of all assets to receive Medicaid.

This is not necessarily accurate for all situations. In most states, you’re not allowed more than $2,000 in countable assets to receive Medicaid, but everything you own isn’t counted towards eligibility.

“Many people think they have to spend all of their assets to qualify for Medicaid,” says Wolf. “They don’t realize that Medicaid has exemptions for certain assets that they can keep and still qualify.”

With Medicaid, asset exemptions vary by state. For example, in most states, the house is exempt if the spouse still lives in it. Other exempt resources could include assets that can’t be converted to cash, burial spaces, business property, household furnishings, personal property, pre-paid funerals and one vehicle. Additionally, the non-applicant spouse is permitted to keep a portion of the couple’s countable assets, which may be referred to as the community spouse resource allowance.

Myth 5: It’s too late to start Medicaid planning once I’m in a nursing home.

Even if you or a loved one has entered a skilled nursing facility, it’s often not too late to hire an elder law attorney for Medicaid planning.

Even if money has already been spent on the nursing facility, it may be possible to save the remaining funds, especially for a married couple, says Wolf.

Find more information about how Medicaid works with senior care, read through A Place for Mom’s Guide to Medicare, Medicaid, and Long-Term Care.

Note: This article was optimized in December 2023 by Melissa Bean. The interviews in this article are from the original version written by Deb Hipp in 2019.


Meet the Author
Deb Hipp

Deb Hipp is a freelance writer in Kansas City, Missouri, who specializes in caregiving, aging and senior living.

Reviewed by

Denise Lettau, J.D., wealth management specialist

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