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Medicaid – The State’s Bizarro World

You may be a fan of Superman or, like me, Seinfeld, and so are familiar with the term “bizarro” or “bizarro world”.   The term is part of popular culture.  Wikipedia’s definition is a weirdly mutilated version of anything.  I am fond of telling clients that entering the “Medicaid world” means one must throw out logic and lifelong habits which can get you in trouble when attempting to obtain Medicaid benefits.  I explain to our clients that much of what we tell them to do is “counterintuitive” to what they have done their whole lives.  They are entering the Bizarro World of Medicaid.   Allow me to explain.

 I had a conversation last week with a married couple for whom we are preparing a Medicaid application.  John is in a nursing home and Mary is healthy and living at home.  I explained to them that Mary can keep ½ of their countable assets, in their case $75,000, but that they must spend down to below that dollar amount by the last day of the month directly preceding the month we want to qualify John for Medicaid.

 I have had this conversation numerous times with clients in John and Mary’s situation and know all too well that this simple instruction is not always followed.   The largest part of most spend downs typically goes to the nursing home.  But, as most people do, myself included, we wait till we get a bill before we pay it.  If I owe you money, I’m not going to chase after you for a bill.  Whenever you get around to it and invoice me then I’ll pay it.  The longer the money stays in my bank account the happier I am.

 However, this can get you into big trouble and cost you tens of thousands of dollars if you wait for the nursing home bill.  If we want John eligible for Medicaid next month and we know that he owes the nursing home $20,000 for the past 2 months of care but they haven’t yet presented Mary with a bill, it makes no matter whether they legitimately owe the facility the money.  If that $20,000 is still sitting in their bank account next month, causing their account balance to exceed $75,000, John cannot qualify for Medicaid.  Even worse than that, he can’t ever qualify for next month.  He has to wait till the following month, which means they will owe the facility another $10,000, leaving Mary with $65,000 to live on.

 That is why we are so focused on getting our clients to change their habits, which isn’t easy to do.  Their entire lives John and Mary have paid their bills, after the vendor presents them with an invoice.  However, I tell them they must go bother the nursing home to bill them ASAP.   Who chases after someone to whom they owe tens of thousands of dollars?  That’s the way it goes in the Bizarro World of Medicaid and why entering this strange land without a knowledgeable guide can literally cost you tens of thousands of dollars.