Top Ten Medicaid Eligibility Mistakes

Over the last 26 years of practicing elder law I have come to realize that most people have the same basic misconceptions and misunderstandings of Medicaid benefits, qualification and planning. I have produced a list below that highlights the most common mistakes people make. I hope this will help you avoid these all too frequent problems associated with obtaining Medicaid benefits to pay for the long-term care.

  1. Medicaid Misinformation. Medicaid provides identical care at the same facilities at a much lower cost to the resident. The majority of nursing home patients receive financial protection from Medicaid. You do not need to be impoverished to receive benefits. A proper plan and implementation can preserve and protect almost any family’s nest egg.
  2. Medicaid is state specific. There are major differences among the state laws regarding Medicaid planning rules. Florida law provides unique opportunities not available elsewhere. Also, rules change over time so it is important to have the most recent information.
  3. Assuming it is too early or too late. Some basic advance planning can provide vital protection later, so you really can’t be too early. However, it is not too late to act even if a person is already in the nursing home.
  4. Going it alone. Maximizing Medicaid planning opportunities is not something easily learned. No two situations are identical and strategies not implemented properly can cause benefit denial. Seek qualified, professional guidance.
  5. Gifting. Changing title to the home, transferring cash or assets of any type without knowing or understanding the consequences of such transfers can cause disqualification. Most people mistakenly feel they can make limited transfers without consequence. These uninformed financial decisions may result in extended periods of ineligibility.
  6. Unused options. Not taking advantage of all spend down, conversion, transfer and exemption funding opportunities. How can funds be properly transferred? Is there a mortgage that can be paid off? Are there home repairs that can be made? Are there items that can be pre-paid? Has an irrevocable funeral arraignment been created and funded?
  7. Not considering the consequences of financial transactions. The movement of money often creates issues with penalties, taxes and estate planning. These issues must be considered and coordinated with your Medicaid plan.
  8. Failing to take advantage of protections for the spouse. The law provides protections for the spouse of a Medicaid recipient. The spouse does not have to be impoverished, lose life savings or their home. Strategies are available to protect the spouse.
  9. Assuming Medicaid caseworkers will help with planning. Except for some limited help with completion of the application, Medicaid employees are specifically instructed not to advise clients on asset protection strategies.
  10. Not planning after approval. Not understanding post-Medicaid consequences. What will happen when the Medicaid recipient passes away? What happens when the community spouse passes away either after or before the recipient? What about the home? Most people feel Medicaid frequently takes your assets and although Medicaid is now more aggressively seeking repayment of benefits from beneficiary estates, proper planning protects most estates from this recovery.