Medicaid Myths

Northland Elder Law

MYTH 1: I have to give away everything I own to get Medicaid.

The Truth: 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 this includes, for example, the marital home that is occupied by the healthy spouse. Whether you are married or not, certain types of prepaid burial contracts are non-countable. There are many other types of ‘”non-countable property”. The bottom line is, you do not need to be completely without assets to be Medicaid eligible.

MYTH 2: I cannot give anything away and get Medicaid.

The Truth: 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 is complicated. Some asset transfers are not penalized under the Medicaid Rules. Consult with a lawyer who knows the law.

 

MYTH 3: I have to wait 5 years after giving anything away to get Medicaid.

The Truth: The disqualification is not always 5 years long and sometimes there is no disqualification at all. True, there is a 5-year “lookback” for most 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 and transfers to certain types of Trusts.

MYTH 4: I can keep all our marital property and my inherited property when my spouse gets Medicaid.

The Truth: When a married person applies for Medicaid, assets in either or both spouses name are considered by the Medicaid agency. However, some assets will not be countable and you may keep some as an asset allowance if your spouse enters a nursing home.

MYTH 5: If I put my property into my spouse's name , I will be eligible for Medicaid.

The Truth: 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. The Medicaid agency explains these rules when the sick spouse gets into the Medicaid program.

MYTH 6: Medicare will cover my nursing home bill.

The Truth: 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 only 20 days of full coverage if you go into the nursing home after at least three days in the hospital, and are getting skilled care (not intermediate level care). Then, if you still need skilled care, you may 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. Coverage under Medicare Advantage plans, however, varies greatly from traditional Medicare. Your individual coverage will depend on your particular plan.

The Truth: You are not required to use your assets to private pay for the nursing home care. 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 is against the law for them to tell you this! The nursing home may be paid less under the Medicaid program than they can collect from private pay patients. It is important to seek advice from an elder law attorney to find out how to become Medicaid eligible before having to spend all of the assets on the private pay rate.

MYTH 8: I can hide my assets and get eligible for Medicaid.

The Truth: 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 state department of social services. You or whoever applied may have to pay Medicaid back to avoid prosecution.

MYTH 9: Medicaid rules that applied to my neighbor when he went in a nursing home will apply to me.

The Truth: Medicaid rules change, so do not count on the law that applied to your neighbor still applying to you. In addition, there may have been facts about your neighbor’s situation that you just do not know. It is best to have your situation analyzed by a competent Elder Law attorney.