Qualifying for Medicaid may seem like a monumental task. Many people think that they need to prove themselves nearly penniless or sell the family home to receive benefits. For those looking into senior care or assisted living, this is an important topic to understand – and there are many misunderstandings surrounding the issue. Here are the Medicaid myths you need to know the truth about.
Top 5 Medicaid Myths
Medicaid rules are complex, and people typically aren’t really sure where to look for information. If you are looking for assisted living options and are wondering about the rules and regulations, often the facilities themselves are a great source of information. Adult residences assist people every day in working through the financial options available to take care of a loved one’s care. There is a lot of information to work through, so here are some of the most frequently misunderstood points regarding Medicaid.
1. Look-Back and Penalty Periods: When you apply for Medicaid benefits, there’s a “look-back period” during which Medicaid assesses account statements, property deeds, cash transfers, asset relocations and tax returns. The look-back period may be 5 years or more, and stipulates how far back your records can be reviewed. Medicaid is given to those who cannot afford skilled nursing or other options, so shifting resources may be viewed as a way to make it appear that you cannot afford other options. If it is determined that resources were reallocated during this period of time, Medicaid will designate a penalty period during which you can’t receive Medicaid benefits. However, people mistakenly think that the look-back period is the same as the penalty period, which is the myth. Penalties are calculated by dividing the amount of non-exempt assets which were transferred during the look-back period by the average cost of skilled nursing in your region. Depending on the amount of monies moved, the penalty period may only be a few months.
2. Retaining Spousal Income: Among the top Medicaid myths is that an individual can’t keep their income if their spouse is a Medicaid beneficiary for their nursing home expenses. While it is true that a spouse’s assets will affect the other spouse’s Medicaid eligibility, income is typically considered separately.
3. Planning in Advance: Many people don’t really plan in advance for the Medicaid application process, but doing so may help to save a lot of money in the long term. Consulting with an elder law attorney or other expert in elder planning can help you to navigate your comprehensive financial picture, calculate what you or a loved one can retain, and then strategize ways to best allocate the funds over the countable asset limit. The earlier people plan for the last years of their life, the most secure they will find themselves. Assisted living and long term care can be costly, and the sooner Medicaid can be qualified, the better.
4. Medicaid is the Same for Everyone: Prospective applicants often speak to family and friends regarding Medicaid before they apply themselves. This strategy may only serve to provide a wealth of misinformation, as every situation is treated uniquely and random observers do not have a complete understanding of someone else’s financial landscape. Not only that, many assume that Medicaid in another state is the same as their place of residence, but differences do exist. An individual’s eligibility for Medicaid benefits typically depends on their age, income, required care, owned assets, place of residence and marital status. All of these variables work together to form a comprehensive profile which is different for every applicant.
5. Financial Eligibility: In most areas, an individual is not permitted to own in excess of $2,000 in countable assets in order to receive Medicaid, The key, however, is what assets are counted towards eligibility. Medicaid has exemptions for specific assets that can be retained without jeopardizing their eligibility. These exemptions vary by state, but nearly all states exempt a home if the spouse still resides there. Other exempt resources often include business property, home furnishings, personal property, pre-paid funerals and the spouse’s vehicle. Additionally, under the Community Spouse Resource Allowance, the non-applicant spouse is allowed to retain a portion of the couple’s countable assets.
Do you have additional questions about Medicaid and assisted living? Call the experts at A Banyan Residence in Venice to learn more about your loved one’s options for senior care and Medicaid.