Dispelling three myths about qualifying for Medicaid
By: Robin Folts, Esq., Partner, and Chair of the Elder Law Department at Lacy Katzen LLP
After my many years as an elder law attorney, I could write a book on the critical economic mistakes clients make when placing a loved one in a nursing home. One of the most significant of these mistakes, especially when there are assets owned by a loved one, is not using an elder law attorney to represent them right from the start.
Many nursing homes, hospitals, and other non-attorney companies will offer to assist you or your family in applying for Medicaid for your family member for “free.” Remember the old adage, nothing good in life is free? Where there are assets to protect, “free” can cost you a bundle. Nursing home and hospital financial case managers, and other non-attorneys can apply for Medicaid for an individual, but only with that individual’s or his representative’s permission. Do not offer permission without legal advice first.
The following three myths are the most common misconceptions I have heard when it comes to qualifying for Medicaid:
Myth number one: Your loved one requires Medicaid BEFORE entering a nursing home. No, there are a handful of nursing homes that I know of in Western New York that will tell you Medicaid must be in place before it will admit your loved one into its facility if he/she does not have private funds to pay the facility (at a rate of somewhere between $11,000 to $22,000 per month!). However, that is not true for other nursing homes, especially when working with an experienced elder law attorney. Facilities determine, in part, whether or not to accept individuals based on how you complete a financial form supplied by the hospital’s social worker.
Social workers in area hospitals can be aggressive because they want to discharge individuals from the hospital to free up beds. They may even tell you, “Get me that financial form right away!” However, rushing to complete the financial form without legal advice could be a costly mistake. The financial form (along with clinical information) is necessary for nursing homes to assess:
- First, whether your loved one can be cared for in that facility, and
- Second, whether you will be privately paying that facility and if so, for how long.
Be sure to seek legal advice from an elder law attorney before completing that form.
Nursing homes are acutely aware of Medicaid planning for residents. Some nursing homes understand that saving some assets is reasonable, and some nursing homes simply do not care if you save a penny or leave any economic legacy. Did you work hard your entire life so your money and assets all will be spent on nursing home care? Most people I know want to avoid having their entire nest egg gobbled up by a nursing home. There are ways to prevent this, but only an elder law attorney will have the experience and knowledge to thoroughly explain the complex strategies for properly preserving assets.
Myth number two: You must spend down your assets before qualifying for Medicaid. That is simply not true in most cases. I have had numerous clients inform me that the business offices in area nursing homes told them they must spend down their assets to the Medicaid limits before they can qualify for Medicaid. There are lawful Medicaid strategies available for most people to protect assets without spending them down even if your loved one already resides in a nursing home, but be forewarned: Did you sign an admission agreement without the advice of an attorney? That could be a critical mistake. Never sign an admission agreement without the advice of a competent elder law attorney. Even though in most cases, you still can apply for Medicaid and protect some or even a large portion of your assets, that will depend on what exemptions you may have and the provisions in the admission agreement, and your elder law attorney can advise you and cast the best light on any agreement you already may have signed.
Myth number three: I already mentioned hospitals, nursing homes, or other non-attorneys preparing the Medicaid application for “free.” Sure, you are not paying money for that service, but if your loved one owns, for example, a house or condo, and does not have adequate exemptions, the house likely will have a Welfare Lien placed against it upon your loved one receiving those Medicaid benefits. So, in the end, that “free” service could cost your loved one his/her house if he/she does not return home. And, upon your loved one’s passing, you will have to probate the estate of the person who owned the home, and who will benefit? The Department of Social Services will file a claim against the estate and be paid, all because you used a “free” service to complete the Medicaid application.
Hospital employees have told me they applied for Medicaid for patients headed for a nursing home but with the intent to return home for the Medicaid applicant. That “intent to return” home is lawfully permissible, and in my view, should be advised by an elder law attorney because that “intent to return home” declaration can and likely will turn into a Welfare Lien if your loved one does not return home. And many times, if the Medicaid applicant is not using an attorney, this critical issue is not disclosed to the applicant. Thus, the result in many cases is when the house is ultimately sold, the net sale proceeds are paid to the Department of Social Services after the expenses of probating the estate are paid. There are better options available in most cases.
The bottom line is an elder law attorney could be instrumental in placing your loved one into the home of his/her choice and on the best financial, and asset-protection terms available. Please discuss your case with an elder law attorney:
- Before applying to a nursing home,
- If your loved one is moving into a nursing home or currently is residing in a nursing home facility and has not applied for Medicaid,
- If there are any assets to protect; or
- If your loved one made gifts in the previous five years leading up to moving into a nursing home.
The material in this blog post is provided for informational purposes only and does not constitute legal or financial advice. Every case is different, and you should consult with a knowledgeable elder law attorney licensed to practice in the state you have residency. If you are a New York State resident, in a nursing home or about to enter one, and need help applying for Medicaid, or if you received a Medicaid denial while residing in a nursing home, please contact Lacy Katzen, we are here to help.
