In the event the client requires home care or institutionalized care in a nursing home facility, an application for Medicaid benefits may be required. Due to complex asset and transfer rules, the application should be made with the aid of an experienced elder law attorney. Again, it is useful in this context for a confidential survey of the client’s assets, as well as any transfers of those assets, to be filled out prior to the initial consultation. This form of financial survey will be significantly different from the one used for estate planning purposes. As a combined federal and state program, Medicaid asset and transfer rules vary significantly from state to state.
There are two different kinds of Medicaid, Community Medicaid and Chronic Care Medicaid.
Community Medicaid
Community based Medicaid applications are any elderly/disabled person who wishes to remain in the community, in the setting of their own home. This benefit requires three (3) months of financial documentation, current proof of income, along with “common documents” and the past year’s income tax filing, with 1099’s. New rules will gradually extend the look-back period to two and a half years, thus requiring thirty (30) months of financial documents.
Although only low income recipients may qualify for this benefit, any middle income person may qualify for this benefit by using the pooled income trust to shelter excess income. By using the pooled income trust even middle class people may become eligible for community Medicaid.
Once benefits have been applied for and a Medicaid “pick-up” date has been established, the applicant may keep some of their monthly income and the balance is required to be contributed to their care, unless sheltered with the pooled income trust. The amounts you may retain are constantly changing and are naturally different for singles and couples. Consult with an elder law attorney for the going rates in your community at any given time.
Resources, which are assets belonging to the applicant and/or community spouse, must be reported and an individual is allowed to keep only a modest amount, around sixteen thousand dollars. If there is a spouse at home, the resource allowance may be as much as one hundred and thirty thousand dollars.
Chronic Care
Perhaps your loved one may no longer stay at home because they have become a danger to themselves or others. Maybe they need too much care or their caregiver is no longer able to manage their care. In such a case you may want to apply for chronic care benefits.
The Chronic Care application requires a look-back of five years, or sixty months. You must provide all financial statements of any open or closed accounts in this time period. Each county is different in the type of documentation you will need to present. Again, all “common documents” must be presented, five years of tax returns, proof of income, and the correct application.
The department of social services will look for any gifts or transfers made in the look-back period (gifts to children, friends, grandchildren, church donations, charitable donations, etc.). Each gift will incur a penalty period determined by the state Medicaid Regional Rates chart published each year. Should you apply before the penalty period has expired you may be asked to provide additional documentation.
On all applications the county will begin an investigation. They will request an IRS report for the past five years, they will request a DMV report to see what vehicles are or were owned, they will request a financial institution report under the applicant’s and his/her spouse’s Social Security number and if something has not been reported the department may charge the applicant with fraud if they feel a deliberate attempt was made to hide assets.
In our experience, most individuals who attempt to file for Medicaid benefits, without the assistance of counsel, either complete the application incorrectly, do not provide the correct documentation or give unnecessary information which causes the county to investigate further. These types of errors may require an appeal, known as a Fair Hearing, to have the matter rectified.
An individual applying for chronic care benefits and who is in a nursing home is required to pay virtually all of their income towards their care. The community spouse, if there is one, is allowed to keep about three thousand three hundred dollars per month in income and, if they fall short, the institutionalized spouse is allowed to contribute some of their income to the community spouse before paying the nursing home.