Medicaid Mistakes

Common Medicaid Mistakes

The Medicaid (i.e., Medical Assistance) process is very complex. At its core is the issue of making sure certain asset levels are in place. In order to be eligible for Medicaid, the applicant must have no more than $2,500 in countable assets. But, often the issue is, when do you need to have $2,500 in countable assets? And, what even is a countable asset? It is easy to make Medicaid mistakes—and the result can be disastrous.

Medicaid Mistakes: Timing of $2,500 in Countable Assets

The applicant must have no more than $2,500 in countable assets as of the last day of the month prior to seeking eligibility. We often advise clients to make sure the applicant has no more than $2,000 in countable assets. That leaves some wiggle room. If you are one penny over $2,500, then you are ineligible for the entire month. Given that nursing homes cost $10,000 to $13,000 per month, that is a costly mistake.

Often clients get nervous when a parent’s assets exceed $2,500 in a given month. The issue is not whether the assets exceed $2,500 during the month—the issue is what is the balance at the end of the month. To be safe, avoid an electronic transfer at the end of the month, such as to pay a bill at the last second. Even if you initiate the electronic transfer at the end of the month, the transaction may not post until on the 2nd or 3rd of the next month. That causes an overscale issue, costing you another $10,000 to $13,000 in an extra month of nursing home payment.

Medicaid Mistakes: What is a Countable Asset?

In short, a countable asset is anything you can liquidate to pay the nursing home. But there are a good number of exceptions. Most cars are considered non-countable assets, but a luxury automobile is a countable asset. However, what exactly constitutes a “luxury automobile” is not clearly defined. Boats are countable assets, regardless of value. Personal effects are generally not countable assets unless you have a valuable collection. Again, “valuable collection” is not defined. If you own more than two burial plots, the third burial plot is a countable asset. The list goes on and on. Suffice it to say, there are many nuances to a Medicaid application.

What if I Make a Mistake?

If you make a mistake on the Medicaid application, the result will be disastrous. It is not uncommon for an application to take several months to process—which means if you made the mistake on the initial application and three months later are denied, Medicaid will not pay the nursing home for three more months. If Medicaid does not pay the nursing home, who will? The nursing home starts to place pressure on the family to pay. Or, they will start the eviction proceedings. Or, they will go after the person who mistakenly signed the nursing home contract in their own name (another mistake to avoid). Contact our firm to assist you in this process. It is easy to make Medicaid mistakes. Even if you make a mistake, we may be able to help.