sidestepping obstacles to medicaid

Filing for Medicaid can be a maze of obstacles with potential pitfalls around every bend.

Some of the stumbling blocks you may come up against during the application process include:

“Mom has no income but she was denied.”
Medicaid counts Social Security, pension, IRA income and family assistance, among other sources. Most people today are over the income limit of $934 per month and, once on Medicaid, they will have to give up all income over that limit. But there is an easy remedy: a Pooled Income Trust which lets you shelter your income.

“I’ve been approved but don’t have home care yet.”
Home care does not “just start” once Medicaid is approved. The applicant will need two New York State Independent Assessment evaluations and then must enroll in a Managed Long Term Care Plan (MLTC). Understanding the timeline, the order of evaluations and how the assessments determine provided hours can make a difference in the timing and amount of care you will receive.

“My Dad has dementia so Medicaid should provide 24-hour care.”
MLTC, the main program providing home care, is not required to provide care for “safety and supervision.” As a result, many people are offered much less care than needed because of this exemption—even if dad should not be home alone.

“My Mom doesn’t really have any assets, but she was denied.”
Assets considered by Medicaid include checking, savings, CDs, stocks, bonds, life insurance, annuities, retirement accounts, etc. The cash value of life insurance is counted dollar for dollar as an asset to the owner of the policy. IRAs/annuities are only exempt as an asset if you are taking a distribution consistent with the life expectancy table used in your county—this is true even with retirement accounts that do not require a distribution such as a ROTH IRA or some deferred compensation plans. 529 College Savings accounts belong to the owner—not the person you are saving for. Knowing up front how to position these assets to benefit you can save time and money.

“The nursing home will file for my dad.”
There are strategies to protect some of your assets if you go into a nursing home and have not done any planning (or your planning did not meet the five-year lookback). For instance, if you have a spouse, assets can be transferred to the spouse and a spousal refusal can be implemented. If you have an adult disabled child, assets can be transferred to that child without penalty. You can prepay your own funeral expenses in full as well as those of your children to spend-down your assets. Relying on the nursing home’s finance department can be costly.

As always, knowledge is power; consider seeking the assistance of an expert when needed.

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