Medicaid Planning

Matt and Chad have assisted hundreds of individuals and families with the complicated process of pursuing Medicaid benefits to cover nursing home care when one's own assets are insufficient. However, when possible, they will endeavor to protect and preserve assets for the spouse and heirs.

Medicaid Applications

Matt and Chad are able to assist with the complex and confusing process of applying for Medicaid (nursing home) benefits on behalf of yourself or a family member, including meeting with the staff at Medicaid.

Common Medicaid Myths:

Myth: “Medicare will cover my nursing home bill.”

Medicare only covers a small amount of the nursing home care provided in this country. Many older people are surprised to learn this. In general, there are 20 days of full coverage if you go into the nursing home after at least three days in the hospital, and are receiving skilled care (not intermediate level care). Then, if you still need skilled care, you can get up to 80 days of partial coverage from Medicare. After that, you will either pay out-of-pocket, or get Medicaid, unless you have private long-term care insurance.

Myth: “I have to give away everything I own to get Medicaid.”

Basically, a person is permitted to own some property, and still be eligible for Medicaid. The trick comes in knowing what is “countable” and what is “non-countable” under the Medicaid rules. For a married couple or single person this includes, for example, equity in one home up to $603,000 (2021) with certain exceptions to the equity limitation. Whether you are married or not, certain types of prepaid burial contracts are non-countable. There are many other types of “non-countable property,” such as extensive funeral and burial space planning and some types of annuities. The bottom line is, you don't need to be completely without assets to be Medicaid-eligible.

Myth: “I can't give anything away and get Medicaid.”

In some cases, the Medicaid rules provide that a person can be disqualified for giving away property. However, a lot depends on what is given away, to whom, and when. So again, it's complicated and it changes all the time. Some asset transfers are penalized under the Medicaid rules and some are not. For instance, transfers to a blind or disabled child, to a caretaker child, between spouses, and for the sole benefit of a spouse are allowed transfers under Medicaid law.

Myth: “I have to wait five years after gifting to apply for Medicaid.”

The disqualification isn't always five years long and sometimes there is no disqualification at all. True, there is a five-year “lookback” for some asset transfers under the Medicaid rules. This means that the Medicaid agency will look back at all transfers of property, including sales for less than market value. However, the rules penalizing transfers do not apply to all transfers.

Myth: “I can keep all our marital property and my inherited property when my spouse gets Medicaid.”

When a married person applies for Medicaid, all assets of both spouses, regardless of how they are titled, are considered by the Medicaid agency. However, some assets won't be “countable” and you may keep some as an asset allowance if your spouse enters a nursing home. In fact, there are very special techniques only available to the healthy ("community") spouse that can protect a significant portion of a married couple's assets.

Myth: “If I put my property into my spouse's name, I will be eligible for Medicaid.”

Assets are counted, regardless of which spouse's name they are in. However, the healthy spouse will be given several months to re-title assets from the name of the spouse in the nursing home, into the name of the healthy spouse.

Myth: “If I enter a nursing home as a private pay resident, I must use up my assets before I can get Medicaid.”

You are not required to use your assets to private pay for the nursing home care. However, some nursing homes might try to make you believe that you do have to do this. They are paid less under the Medicaid program than they collect from private-pay patients. Some people seek advice from an elder law attorney to find out how they can become Medicaid-eligible before having spent a significant part of all of their assets on the private pay rate.

“I can only ‘spend-down' my assets on medical or nursing home bills.”

Nursing homes may tell you that you have to spend your savings on the private pay rate, before applying for Medicaid, but this is not true. In fact, it's against the law for them to tell you this!

Myth: “I can give away $15,000 per year under Medicaid rules.”

This is a rule under federal estate and gift tax law, not under Medicaid law.

Myth: “My income may be used to pay my spouse's nursing home bill.”

This is not true in the majority of states, including Kentucky.

Myth: “All of my spouse's income must be used to pay the bill if my spouse is on Medicaid in a nursing home.”

The law allows you to keep a portion of your spouse's income if your income is below certain limits. In addition to this allowance, you may be entitled to a greater allowance if the cost of maintaining your home exceeds a certain amount.

Myth: “I can hide my assets and get eligible for Medicaid.”

Intentional misrepresentation in a Medicaid application is a crime and can be costly. The IRS shares any information concerning income or assets you have with the county department of social services. You or whoever applied may have to pay Medicaid back to avoid prosecution.

Myth: "Medicaid rules that applied to my neighbor when he went in a nursing home will also apply to me.”

Medicaid rules change, and change often, so don't count on the law that applied to your neighbor still applying to you. Also, there may have been facts about your neighbor's situation that you just don't know. It's best to have your situation analyzed by a competent elder law attorney.

Myth: “Medicaid will take my home.”

Kentucky has an Estate Recovery law, but with proper planning by an expert attorney the home may be able to be saved. Estate Recovery means that people who receive Medicaid benefits for nursing home care can be subject to repaying the state for the costs of their care after they die. Typically, that means a claim against the home of the Medicaid beneficiary. The Estate Recovery law is full of traps for those that do not have the foresight to plan ahead with an experienced elder law and estate planning attorney.

Source: Elder Care Matters