The Perils of Medicaid “Redets” – Part 3

In this week’s blog post, I continue with the subject of Medicaid redeterminations and specifically the increased incidents of people terminated as a result of a failed redet application.  In some cases it is because of a lack of notice a I detailed last week.

There have been, however, more substantive reasons.  One way to be terminated is failure to keep under the $2000 asset limit each and every month.  Medicaid measures account balances as of the close of business the last day of the month to determine continued eligibility for the next month.  After approval, Medicaid does not check the balances each month but when it comes time for an annual redetermination, that presents the County with an opportunity to do so.

In a most recent case in our office, the family advised that on a redetermination last year, their mom’s asset balance exceeded the $2000 limit but the caseworker approved the redet anyway.  This year, however, no such luck.  The account balances exceeded $2000 by a mere $36.  In today’s climate, with federal cuts coming, we cannot expect that the State will let such things slide.  The $2000 limit is a strict one.  If you are over by $1 expect that you will terminated.

Another reason for termination focuses on the Qualified Income Trust, which I have written about in the past.  The QIT is required if income exceeds the income cap ($2901 gross income per month in 2025).  Some of the income must be deposited first to a QIT bank account before being paid towards care as part of Medicaid’s cost share requirement.

When we get clients approved, we give them very specific instructions about how to use the QIT and impress upon them that they must follow these instructions each and every month because on a redetermination, the State will ask for 12 months of statements to evaluate whether the QIT is being used correctly.  If not, then Medicaid can and will be terminated.

And what to do if you find yourself in one of these scenarios?  Act quickly and seek professional guidance.  A termination notice will usually state that benefits will terminate at the end of the month upcoming.  While a new application cannot be avoided, there will typically be an opportunity to correct the mistake before the termination date so that the new application can be filed requesting a start date with no gap in Medicaid coverage.

Medicaid notices can be confusing to decipher and as I always say with respect to Medicaid, “timing is everything” so take action without delay.