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No Money, No Transfers, No Medicaid – What Gives?

I received a call the other day from Mary who was at her wits end.  Last year her dad’s  Medicaid application had been denied.  Dad’s finances were quite simple.  He had no money to his name.  What little he had in savings he had spent down for his care and other needs.  Dad received $1300 per month in Social Security.  He rented an apartment not too far from where Mary lived.  There were no transfers from Dad’s account in the last 5 years.  Dad’s health was getting progressively worse and Mary didn’t know where to turn.  So, why wasn’t he eligible for Medicaid?

 It all sounded straight forward.  But then I probed a little bit deeper.  I asked Mary how Dad pays his rent, food, insurance premiums and home assistance with only $1300 each month.  “Well, actually”, Mary told me, “I am supplementing his income.”  I learned that Mary was transferring $750 every month into his account so that he would have enough to pay his bills.  I asked Mary which Medicaid program she applied for. She said she wanted to keep Dad in his apartment as long as she could so she applied for the home based Medicaid program.  That’s all I needed to hear.  I had the answer.

Remember that Medicaid has an income eligibility limit of $2022 per month.  If you have more than that you can’t qualify for some of the Medicaid programs, but you can for others.  In Mary’s case, she applied for one with a hard cap, so to speak.  But, Dad has $1300 in income.  Why wouldn’t he be eligible?

 That’s because there is a specific Medicaid regulation, that counts as income, any regular contributions by family members over an extended period of time.  And that’s exactly what Mary was doing when she deposited $750 each month into Dad’s checking account, giving him $2050 of income per month, $28 over the limit.  I explained to her that it would have been better for her to simply buy her Dad some of the things he needed. This way there would be no income and he would have been well below the income cap.

 The good news is that, with this change, Dad can now be eligible for Medicaid.  The bad news is that it took Mary a year to call us to learn this information.  Dad lost a full year of benefits.  Just another example of how when it comes to Medicaid, looks are deceiving.  What appeared to Mary to be so simple actually cost her tens of thousands of dollars and a lot of heartache and stress.