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Medicaid Applications – Like a Tax Audit on Steroids

While I am not an accountant and have never experienced an income tax audit, when describing the Medicaid application process I often reference it to a tax audit.    It is an intrusive government review of an applicant’s finances over a 5 year time period.

I have been filing Medicaid applications for 25 years and it seems with each passing year the requests by the State become more burdensome and the hurdles we must jump through more voluminous.  Since the last change in the Medicaid laws 15+ years ago, 5 years of statements for every asset the applicant owned has been required, up from 3 years.

In the past year, however, I am finding that the State is doing much more.  It is more frequently  running  checks of an applicant’s  Social  Security number and coming back to  us with  requests for  documents concerning other financial accounts-in  many cases with  little to no information other than the name of the bank.  Often this information is incorrect, with the bank telling us no accounts exist.  This then leads to a back and forth with county caseworkers concerning the accuracy of their  sources.

The state is also routinely asking for the statements for all credit cards for the past 5 years.  Scrutinizing these statements, it requests invoices to prove the charges were for products or services received by the applicant and not for another person.  

This new routine followed requests – also now the norm – for all checks written and deposited to and from each and every account.  The bottom line is that the State will leave no stone unturned in its effort to assess a Medicaid penalty or period of ineligibility for benefits which will delay the receipt of benefits and in some case permanently avoid the payment of Medicaid benefits.

As you can see, the whole process is intense and intrusive – like a tax audit on steroids.  With the current pandemic and economic slowdown approaching a year, we can expect more of the same scrutiny in 2021.  So if you or a family member are expecting to apply for Medicaid be prepared to track down a mountain of documents and information if you hope to have any success.