Long Term Care

How to Apply for Medicaid Nursing Home Benefits

Nursing homes are expensive.  Medicaid (called SoonerCare in Oklahoma) covers the cost of Nursing Home expenses for those who qualify.  Unfortunately, many myths surround how to apply or become eligible.

Medicaid Myths:

  • You cannot own anything
  • You have to give everything away
  • You can only have $2,000
  • You cannot be eligible for 5 years

Medicaid Eligibility

Medical:  The person applying for Medicaid must need services provided either in home or in a skilled nursing facility.

Financial:  The rules surrounding Medicaid eligibility are very complex.  Medicaid is a federal program that states administer.  There are rules regarding assets, however there are many exceptions and exemptions from those rules.  In short, a person applying may have far more than $2,000 and still be eligible.  Married couples can protect large portions of their life’s savings.

Citizenship:         Applicants must be United States citizens.  Certain exceptions apply to certain non-citizens residing here legally.

Medicaid Application and DHS

The Medicaid application process can be simple but many people fail to become qualified if they do not provide the correct information.  The caseworker looks at the income and current assets.  Perhaps the most troublesome requirement is the production of 60 months of records, including cancelled checks, from all financial institutions.  These are required for any account even if it has closed during the 60 months.

Why does Medicaid Want 60 Months of Records?

The 60 months is called the “Look Back Period”.  Transactions are examined to see if property was given away for sold for less than its fair market value.  If such a transaction is found, the caseworker may impose a “Penalty Period”.

What is a Penalty Period?

The Penalty Period is amount of time the applicant must wait before Medicaid will begin paying for the care. 

Penalty Period Examples:

Example 1:  It may be possible to explain the transfer to the satisfaction of the caseworker.  However, it is likely that the transfers will be penalized.

Applicant gave grandchildren $10,000 over the past 60 months (birthday or Christmas presents)$10,000
Medicaid divides that amount by the daily divisor  The 2017 rate is $144.6710,000 ÷ 144.67 = 69

 

Penalty Period69 days

 

Example 2:  In a recent case, a penalty period was imposed on church tithing.  The applicant appealed to a Fair Hearing and was able to show that the giving was a pattern that had not changed in decades.  The Appeal wiped away the penalty period.

Applicant gave Church $10,000 over the past 60 months as a pattern of tithing or giving.$10,000
Medicaid divides that amount by the daily divisor  The 2017 rate is $144.6710,000 ÷ 144.67 = 69

 

Penalty Period69 days reduced to zero on appeal

 

Example 3:  Father deeds $400,000 farm to son and applies for Medicaid 4.5 years later.  This example demonstrates two points.  First, if the date of application was delayed 6 months, then the transfer of the farm would not be considered at all.  The second point is that there is no limit to the amount of the Penalty Period.

Applicant deeded son a farm valued at $400,000  4.5  years ago$400,000
Medicaid divides that amount by the daily divisor  The 2017 rate is $144.67400,000 ÷ 144.67 = 2765

 

Penalty Period2765 days (7.5 years)

What is a Fair Hearing?

A Fair Hearing is a process where the decision of a caseworker can be challenged.  Denials of applications and imposition of Penalty Periods are good reasons that such an action may be considered.  A notice of disagreement is filed.  It is a good idea to prepare a brief stating the applicant’s side of the case.  In the brief, the factual or legal conclusions behind the casework’s denial or penalty period can be fully challenged.  At the hearing itself, the parties are allowed to present their sides.  The Administrative Hearing Officer takes the matter to a committee that then issues an order which may agree with, overturn or modify the caseworker’s decision.

How an Elder Law Attorney Can Help:

It is never too late to plan even in crisis.  Among the things Elder Law Lawyer can do includes:

  • Presenting the application for benefits in a way that explains the exceptions or rules for the caseworker.
  • Identify troublesome transactions that may cause penalties. Once identified, there are ways to cure the penalties, delay applications or take some other course to avoid or minimize the Penalty Period.
  • Developing permissible transfers that preserve assets while minimizing penalty periods.
  • File a Fair Hearing Request and represent you at the hearing.

 

While no attorney can guarantee results, applicants typically benefit from the services of an Elder Law attorney knowledgeable with the workings of Medicaid.

Can Somebody with Dementia or Alzheimer’s Make a Will?

Yes, but there may be a point where this becomes impossible.

Families often face a difficult situation when they receive a Alzheimer’s or dementia diagnosis.  Often, the signs preceded the diagnosis.  Whether an individual is dealing with a suspicion or “official” diagnosis, there may still be an opportunity to create an estate plan.   In fact, there is a great need to do so.

Good News, Estate Planning is Possible

Everybody over the age of 18, even those with a disease affecting their brain, is presumed to be competent to create a will.   This means that they have “testamentary capacity”.  Even if somebody has been determined by a court to be incompetent, there may be times when the person may have lucid intervals when he knows the extent of his estate and who should receive the inheritance.

Nature of Dementia, Windows of Opportunity

Most of us who have been around suffers of dementia realize that it is not an all or nothing condition.  For example, the term “sundowners” unsplash-windowrefers to the worsening of dementia in the late afternoon or evening.  At those time, individuals may hallucinate, become agitated or paranoid.  See http://sundownerfacts.com/symptoms/  Strangely, for some of these people the conditions disappear or lessen the next morning.

Generally, dementia such as Alzheimer’s is progressive.  However, the rate that it progresses varies.  According to Alz.org.[i]

The symptoms of Alzheimer’s disease worsen over time, although the rate at which the disease progresses varies. On average, a person with Alzheimer’s lives four to eight years after diagnosis, but can live as long as 20 years, depending on other factors.

From a planning perspective, it is best to draft and sign essential estate and asset planning documents early.  These may include:

  • Powers of Attorney

  • Wills

  • TrustA photo by Sonja Langford. unsplash.com/photos/eIkbSc3SDtI

  • Advanced Healthcare Directives (Living Wills)

  • HIPAA Releases

Concerns about Long Term Care

In addition, this is an ideal time to make plans for governmental programs that can help pay for care.  For example, Medicare does not pay for long-term care in a facility.  However, Medicaid can be an option to explore.  Also, veterans, their spouses and widows can be eligible for certain pensions such as the VA Wartime Pension also know as Aid and Attendance.  However, both Medicaid and certain VA benefits are needs based.  This means that those with too much income and or too much in net worth may not be eligible for these programs.  However, individuals can become eligible without losing their life savings.

In short, when a diagnosis occurs, it is a good idea to consult with an elder law attorney who has knowledge about the disease, the needs of the family and how to navigate through the Medicaid and VA eligibility requirements.  However, failure to take advantage of the opportunity to plan may result in the need of guardianship or other court administered processes.

[i] http://www.alz.org/alzheimers_disease_stages_of_alzheimers.asp

The goal is to preserve as many assets as possible and provide the maximum income for the spouse.

Crisis Medicaid Planning, What to do When You Need a Nursing Home Now

Medicaid is a needs based program. This means that people with excessive assets or income cannot qualify for Medicaid. For many, this will be the only government program that they will ever seek.  (These are general rules in Oklahoma).

What Assets Count and Don’t Count?

Non-Countable Resources:

These are things that you can own without becoming unqualified for Medicaid. Generally these are:Nursing Home Patient
• Your home
• One car
• Household belongings
• Prepaid burial plans
• Family burial plots
• Term life insurance
• Whole life insurance with face & cash value below $1,500.
• Retirement accounts in payment status

Countable Resources:

Maze Medicaid Rules fotoAlmost everything else is considered a resource that Medicaid look at to determine whether or not you qualify. This can include:
• Cash / Money Market Accounts / CDs
• Stocks / Mutual Funds / Bond Funds
• Nonresidential land
• 2nd or more cars
• Cash value in life insurance policies
• Businesses
• Income generating properties

Things you cannot have & qualify

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  •  Life insurance with cash value over $1500

  • Institutionalized individual with

    • More than $2,000 in countable assets or

    •  Income greater than $4450

  • A married couple with excessive assets (those with more than $25,000 in countable resources need a plan)

Crisis Planning can solve many of the issues that would prevent an individual from receiving benefits.

For example, it may be possible to shift assets and income from the institutionalized spouse to the well spouse.
Life insurance policies may be converted to a living benefit or liquidated.
It is possible to “Spend Down” countable assets so that they do not count. Spending down may include:
• Repairs or improvements to the home
• Upgrading vehicle
• Purchasing Prepaid Burial Policies
• Paying off debts or taxes
• Paying for services
• Purchasing Medicaid Qualifying Annuities
• Making Medicaid Qualifying Loans

What if Medicaid Has Turned You Down?  Has Medicaid Imposed a Penalty Period?

It may be possible to correct the issues and reapply.

Get my resource brochure.

For those seeking services in Oklahoma, download and complete this Questionnaire:

mediciad crisis planning worksheet

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