Whenever I explain how the Medicaid application process works, the toughest part is communicating to clients the uncertainty that exists because of the way the program is administered. And that can change at a moment’s notice so beware of what or who you rely on. Whenever I hear someone tell me “the Medicaid caseworker said I could . . . (fill in the blank)”, I get leery. A recent change in one county Medicaid office’s policy illustrates my point.
If you are a frequent reader of this blog, you know something about the Medicaid look back and the Medicaid penalty. Together with the Medicaid application, one must produce 5 years of records for every account and financial asset, going back from the date of the application. The State looks through those statements to determine if there have been any transfers for less than fair value, meaning money spent for which something of equal fair market value in product or service was not received.
They add up all the “transfers for less than fair value” over the 5 year time frame, divide that number by another number – the monthly average cost of nursing home care statewide – to arrive at the Medicaid penalty, the number of months the applicant is not eligible for Medicaid even though he/she has met all the other qualifications. This can be devastating to a family after their loved one has spent everything, expecting that the State will now pay, only to be sent away empty handed.
The common question I get is, “Mom gave gifts of $100 or $200 for birthdays, holidays, etc. Will Medicaid count those gifts and impose a penalty?” Another question is
“I heard that Medicaid won’t look at anything under $500 or $1000. Is that true?”
My answer has always been the same. Whatever you may have been told might be accurate, however, that simply reflects the policy of that particular county office at that particular time. (The policies can vary greatly from one county to another). The problem is that when your application comes across the Medicaid desk, the policy may have changed. In fact, that’s exactly what has happened in one county.
Recently, one caseworker told us that now her office routinely asks for copies of all checks as small as $250, where previously they had required us to produce checks of $1000 or more. This means they are likely to assess penalties on smaller gifts. That’s not to say that all counties will follow the same policy. They don’t. But, how do you know which counties do and which don’t? And what should you do about it? The answer is “it depends on the situation”. Each application has its own set of facts, each family “its own story”. What we do in one case may be very different than how we handle the next, although to the untrained eye the two situations may appear to be identical.
If you are not well versed in the system it is impossible to know who or what to believe. That’s why it is so dangerous if you insist on being a “do it yourselfer”. I always ask people whether they would ever consider walking into an IRS tax audit without an attorney or an accountant. It is the same thing with Medicaid. What you don’t know just cost you tens or hundreds of thousands of dollars in lost benefits and a whole lot of aggravation.