We often receive calls from people who are worried because they can’t afford to pay for a spouse or family member who suddenly needs long term care. Their worry usually stems from a perception that they will not qualify for Medicaid benefits. It often turns out that they have received bad information about how Medicaid qualification works. Below, we tackle the five most common myths we hear about Medicaid.
#1: You must spend all of your money before you can qualify for Medicaid.
Many people think that they cannot qualify for Medicaid because they haven’t spent down all of their funds. However, there are many ways to qualify for Medicaid that do not require a person to spend all of their assets. In fact, most Medicaid applicants can utilize Medicaid policies to allow them to preserve and protect their assets.
#2: You must sell your home to qualify for Medicaid.
Actually, the opposite is true. Medicaid allows an applicant to keep their home and still qualify for benefits. Note that the state may be able to place a claim against an applicant’s home when they die. Currently, an applicant can protect their estate from this by utilizing a proper lady bird deed.
#3: To use long term care Medicaid, you must reside in a skilled nursing home.
In Michigan, there are several Medicaid programs. One program does provide assistance with paying for skilled nursing homes. However, two other programs that pay for long term care can be used by applicants who wish to live in their home, with a family member or even in an assisted living facility. In fact, there is a program that will pay for care at a day facility. For applicants who need help, but don’t necessarily need a skilled nursing facility, the other long term Medicaid programs are great options.
#4: You can transfer $15,000 to family members in order to qualify for Medicaid.
During the years before you apply for Medicaid, transferring money or giving away money and/or assets to anyone will create a divestment. A divestment causes a penalty against your benefits. Currently, for every $9,560 an applicant gives away, Medicaid will not pay the cost for one month’s care. Giving away assets includes selling an asset for less than its fair market value, adding people to a deed, and even some conversions of cash to an annuity will create a penalty.
#5: Your prenuptial agreement will protect your assets if your spouse applies for Medicaid.
When a spouse applies for long term Medicaid benefits, a couple must disclose all assets, including assets solely owned by each spouse. This is true even if the couple has been married for decades and has never commingled their funds. However, as mentioned above, there are strategies for married couples to allow them to preserve their assets.
Help Is Available for Medicaid Qualification
You can encounter a variety of pitfalls when you prepare to qualify for long term Medicaid benefits. However, a skilled and experienced elder law attorney understands Medicaid policies and uses that knowledge to help clients:
- avoid a denial of benefits.
- avoid a penalty period from making improper transfers.
- avoid spending all of their funds to qualify.
Contact your Warner attorney, or Catherine Jacobs, for assistance with Medicaid or other legal issues related to aging.
