Category Archives: Medicaid Planning

How to Apply for Maryland Medicaid

What Is Medicaid?

Medicaid is the name of the federal program that helps people with medical costs. In Maryland, the program is called Medical Assistance.

In the context of elder law, Medical Assistance is the program that covers skilled nursing care. There are three levels of care for most seniors: 1) independent living; 2) assisted living; and 3) skilled nursing care. Medical Assistance helps pay for skilled nursing care in the nursing home.

Where to Apply for Maryland Medicaid?

A Medical Assistance application must be filed with the local department of social services. Many of our clients are in Baltimore City and Baltimore County, and their applications are filed at the Bureau of Long Term Care in Catonsville. Depending on which county the applicant lives in, the application may be filed at the Catonsville office or another local department of social services office.

When to Apply for Maryland Medicaid?

The critical date to consider is the last day of the month prior to filing the application. That is a key date in terms of getting the assets in place.

Who Is Eligible for Maryland Medicaid?

Medical Assistance is a very asset-driven process. The Medical Assistance applicant can have no more than $2,500 in countable assets, while the community spouse (if any) can have no more than $130,380 in countable assets. (The community spouse is the healthy spouse who is not applying for Medicaid. It is important to note that the Community Spouse Resource Allowance changes regularly, and this maximum allowance may be lower in some circumstances.)

What Is a Countable Asset?

In short, a countable asset is anything that the applicant or applicant’s spouse can liquidate to pay for nursing home expenses. But there are a number of exceptions to this rule. For instance, the house may be a countable asset, but it depends on factors such as the title to the house, if it was the primary residence, and the amount of the equity in the house. There are a whole host of other quirky rules when it comes to what is a countable asset or not.

How to Access Your Parent’s Assets?

But a preliminary question that you must ask is, “Can you access this asset?” If you’re like most of our clients, then you are probably looking into this issue on behalf of one of your parents who needs nursing home relief. We often work with the daughter or son who is responsible for filing the Medical Assistance application on behalf of their parent.

If you want to access your parent’s assets, then the key document for you to have in this process is the financial power of attorney. It is this document that will allow you to access your parent’s assets—in order to either make them available to pay for nursing home expenses or to put them in a position to be protected from nursing home expenses.

Financial Power of Attorney

The first document we review when a son or daughter comes for a consultation regarding their parent is the financial power of attorney. We typically know in the first few minutes of the consultation if the document they have is going to help facilitate what we want to do or be a problem.

Some people think it will be “easier” to just grab a power of attorney online. However, this can cause several issues. For example, it could be improperly executed; it might not provide the power you need; it might not conform with the changes to the power of attorney rules enacted in 2010; or the current agent might be the community spouse, but they don’t want to relinquish their role as power of attorney holder. Of course, even if there is a wish to get a new power of attorney, it may not be possible if the parent is no longer competent enough to grant one. In that event, the court needs to get involved in order to appoint a guardian.

So, don’t try to do this on your own. Have an experienced elder law attorney draft a proper financial power of attorney that is robust to handle just about every situation. It is our practice to go through this document with you section by section and explain how each section is used, from a practical point of view.

How Long Does It Take to Apply for Medicaid?

If you can get the assets in place within the month prior to seeking the application, then the Medical Assistance application can be filed with the local department of social services, and then…you wait.

Medical Assistance case workers have 30 days to make a “yes” or “no” determination regarding your application. But almost always they ask for more information in a document that both you (if you are the Medical Assistance representative for the applicant) and the nursing home receive. Often, the information asked for by the case worker is due in a week, or a few days, or the deadline has already passed. Unfortunately, because of the normal processing time within the Department of Social Services and the United States Postal Service, it is not unusual that this type of deadline occurs.

How to Prepare

Medical Assistance is such a paper-intensive process (i.e., five years of tax returns, birth certificate, marriage certificate, access to five years of financial accounts and transactions, etc.) that the process itself may seem unwieldy.

It also means that you should be prepared, as a Medical Assistance applicant, to explain every transaction on the five years of banking activities. The normal rule is that the transactions greater than $1,000 are examined (although that is not always the case). All kinds of unique issues may be raised here, from co-mingling assets with a relative, to the gifting of assets, to unexplained deposits and withdrawals. However, you as the applicant have the burden to prove the transactions at issue are not disqualifying events.

The normal Medical Assistance application process takes about three to five months, but it can certainly vary, depending on the complexity of the application. Our firm gets involved with all kinds of Medical Assistance applications, whether it’s a normal application for benefits with no complications, or whether it’s a complete disaster with assets and transactions that are voluminous or unknown.

The Medical Assistance Minefield

Applying for Medical Assistance is like walking into a minefield. This is an analogy that we have created and continue to use with our clients.

If you’re preparing to apply for Medical Assistance, then let us help you navigate the minefield—before it’s too late and mistakes are made. As your family prepares to apply, you will be better served by getting a clear roadmap of your unique application, the problems that you may encounter, the methods to overcome them, and if applicable, methods by which you can protect your family’s assets when you have to pay for things that Medical Assistance will not cover.

Our firm can help, whether you are just starting the process, or whether there is a looming Medical Assistance hearing and the nursing home is threatening to discharge your parent (or worse). Call us today for a consultation at (410)-296-8166 x292.

Elder Law Office Maryland. Estate Planning. Nursing Home Negligence. Asset Protection. Probate. Medicaid.

How COVID-19 Impacts Medicaid Applications

COVID-19 has brought a lot of anxiety regarding long-term care facilities. However, we understand that even in a pandemic, there are seniors who need to be cared for in a nursing home.

With nursing home costs ranging from $9,000 to $12,000 a month, applying for medical assistance (i.e., Medicaid) is a practical reality for most nursing home residents.

But how has COVID-19 impacted how long it takes to process a Medicaid application? There are several factors to consider:

  1. The number of people applying for Medicaid
  2. The number of people processing the applications
    • First, the staff at nursing homes. They fill out the health assessments that are needed as part of the applications.
    • Second, the case workers at the Department of Health. They process the completed applications.

An increase in the number of Medicaid applicants and/or a shortage in the number of people processing the applications will increase the amount of processing time.

Before COVID-19

Before the pandemic, Medicaid applications, especially those with complications, were slow to be processed. This was due to the chronic shortage of case workers at the Department of Health.

At the Start of COVID-19

When the pandemic began, hospitals were keeping their patients longer instead of discharging them to nursing homes. This was because of the growing concern that nursing homes were not prepared to address the spread of COVID-19 amongst their residents.

The result was that, for a period of time, there were fewer transfers to nursing homes, which meant that fewer individuals were applying for Medicaid. Fewer applications resulted in quicker than normal response times for the granting of Medicaid applications. But this was at the beginning of COVID-19.

Currently During COVID-19

Hospitals are now discharging patients to nursing homes at a more regular pace. Therefore, the number of Medicaid applications is back to normal. Also, the processing speed of the case workers is back to normal.

However, the new bottleneck is with the nursing home staff. Due to staff shortage, it’s taking nursing homes longer than normal to provide the health assessments that are needed for the applications.

Local Elder Law Firm: How We Help During COVID-19

These are trying times for most people, but especially the residents and staff at our area nursing homes.

No one likes a delay in the Medicaid application process. If you have a loved one in a nursing home, then you are understandably already worried about the risks of COVID-19. If the process to apply for Medicaid is long and drawn-out, then that can create even more concern. The nursing home is also more anxious about getting paid during this period, and they may institute involuntary discharge proceedings.

A good elder law attorney understands the Medicaid application complexities (from both a nursing home point of view and a client point of view) and how this is going to impact clients. At the Law Office of Adam J. Roa, we help you understand why the Medicaid application process is slower than normal, and we help expedite that process, so your loved one can get the medical assistance they need.

Medicaid Income Issue

Medicaid Medical Assistance Rules About Countable Assets

Medicaid Medical Assistance rules clearly indicate that:

  1. Income is converted at the beginning of the next month to a countable asset.
  2. Applicants can have no more than $2,500 in countable assets.

Applicants whose incomes are deposited at the beginning or middle of the month usually have no issues with these rules. However, applicants whose incomes happen to arrive at the end of the month can be disqualified.

Disqualified Because of End-of-Month Income

Let’s suppose an applicant receives a pension income of $3,000 that arrives on the 30th of each month. In that case, the income hits the account on the last possible day. The first of the month rolls around, and then, by no fault of the applicant, that $3,000 worth of income is now a countable asset. The individual is disqualified from Medical Assistance since the countable assets are over-limit. It seems to be a worse case scenario of never being able to qualify for Medical Assistance. Unfortunately, the Maryland Medical Assistance Manual is not clear on this point.

Administrative Law Judge Ruled for Grace Period

However, this issue was addressed in an administrative law hearing, and the ALJ ruled that income does not automatically convert to an asset as of the first of the month. Rather, income that hits at the end of the month is allowed a grace period before it converts (if unspent) to a countable asset. That opinion is posted here: ALJ Opinon on Income at the End of the Month.

Medicaid Mess

Filing for Medicaid

Filing for Medicaid (called Medical Assistance in Maryland) is a very paper intensive process. Often times it is the children of the parent who ends up trying to gather the mountain of information needed for the application process. Given the five year look back requirement, the burden is often high on that family member.

Medical Assistance Penalty Transfers

Because of the strict rules governing Medical Assistance penalty transfers, those transactions that occurred that were innocent at the time could be devastating for eligibility now. It is very common for an aging parent to live with her child and their family.  It is also very common for that parent to co-mingle her social security income and pension income to the child’s bank account to help pay for the house expenses. But, in the eyes of Medical Assistance, that transfer from mom’s account to her son’s account will be treated as a Medical Assistance penalized transfer. This can be a real mess if this type of transfer was routine and had occurred over the course of several years.

The Cost of Transferring Money

A penalized transfer is a penalty imposed by Medical Assistance that provides that for every $6,800 transferred or gifted out of mom’s account it will result in one month of Medical Assistance eligibility which will start only when you file for benefits.  So, in this case, assume that mom’s social security income was $1,500 a month and this arrangement of her giving her income to her son for the family’s expenses occurred over every month over the last 4 years. That’s $72,000 worth of transfers! Those transfers will result in approximately 10 1/2 months of Medical Assistance ineligibility.

Medical Assistance: Application Processing Time

That penalty start date will not even start until you file for Medical Assistance (at a time when the parent cannot have more than $2,500 worth of assets). Given that a Medical Assistance application may take many months to process, you could receive a denial notice 5 months after you apply. In the meantime, the nursing home bills are accumulating at $11,000 a month. Once that application is denied, the nursing home will expect payment in full or threaten to start the discharge process. They will also take a hard look at who signed the nursing contract and if there was a child who signed the contract they will put pressure on that child to pay the outstanding balance.  It is a mess.

Detangling the Medicaid Mess

Our office can help a family unwind and get rid of this mess. Medical Assistance rules are complicated and harsh. However, our office is good at taking complex Medical Assistance “messes” and getting Medical Assistance eligibility. We recently handled a case with facts very similar to the facts mentioned above and obtaining full Medical Assistance eligibility with a determination of zero penalized transfers. Naturally, the client was pleased.

Another Win! – Medical Assistance Issue

We just won another Medical Assistance appeal issue.  In this case, Medical Assitance was initially denied for nursing home benefits and the son of the Medical Assistance applicant was handed an invoice from the nursing home for over $100,000.  Needless to say, he was upset.  We were able to successfully argue that that the transactions at issue were not Medicaid Penalty transfers and that full Medical Assistance benefits should have been granted from day 1.  We received the Administrative Law Judge opinion today removing approximatley 98% of the penalty.  Client is happy.

Looking for IRA Assets

The issue of whether or not an IRA asset is a countable asset is an interesting issue from a Maryland Medical Assistance perspective.   For individuals and their spouses, when an ill spouse goes into a nursing home and reviews the issue of applying for Medical Assistance for the ill spouse, the issue that routinely comes up is the issue of what is a countable asset towards the Medical Assistance threshold for the community spouse and ill spouse (i.e. how much can the ill spouse and community spouse own and still be eligible for Medical Assistance benefits).  From a Maryland perspective, and IRA account and other forms of retirement accounts are fully countable assets.  This is specifically addressed in the Maryland Medical Assistance Manual and all of the caseworkers are processing Medical Assistance applications counting IRA and other forms of retirement assets as countable assets.  The real question is whether or not Maryland is correct in treating the IRA and other forms of retirement assets as countable assets.  The answer is Maryland may well indeed be incorrect.  We are looking for the right client scenario to push this issue and clarify and correct this fundamental determination that IRA and other retirement assets should not be countable assets.

What is a countable asset?

For Medical Assistance (i.e. Medicaid) eligibilty, Maryland will examine the amount of assets held by the applicant and by the applicant’s spouse (if any).  The most the applicant may have at the time of filing is $2,500 and the most a spouse may have (currently) is $109,560.  The bigger question is what is a counable asset?  This may seem to be very straightforward but is absolutely not an easy question to answer.  For example, we often are asked if automobiles are countable assets.  The answer is no, so long as it is not a luxury automobile (however, there is no set defination of a luxury automobile).  Some assets are relatively straightfoward and it is easy to see how they are countable assets.  This includes bank accounts in the applicant’s name.  But what about burial plots?  The applicant is allowed to have 2 burial plots.  But, what if he has his name on 3 burial plots, then what?  That’s when you call your elder law attorney.  What happens if I jointly hold my account with mom and I contributed my own money into mom’s account.  Is “my money” part of her countable asset.  That is when you call your elder law attorney.  What happens if my mom has a reverse mortgage on her house, is this a countable asset?  Again, you need to call your elder law attorney.  The point is, this area of elder law is confusing, it changes, and the deteermination of what is a countable asset does vary state to state.  And, most importantly, the determination of a countable assets will be absolutely critical when filing the Medical Assistance application and determining which assets can be saved.

Nursing Home Asset Protection

A good portion of our clients engaged in virtually no planning (before they came to our office) when faced with a parent or loved one entering a nursing home.  Even in this late stage of the game, there are plenty of opportunities to protect a parent’s or loved ones’ assets from nursing home related costs.  The key document to this process is the financial power of attorney for the nursing home resident.  Without a doubt, this document will be key to the asset protection process.  Ideally, this power of attorney was drafted by an attorney and, if recently executed, conforms with the new Maryland provisions relating to financial powers of attorney.  Without this document, the next question is whether or not the nursing home resident can sign a new financial power of attorney.  Even if this person cannot sign (or should not sign), then seeking court authorization will be neccessary.  The absolute key is that just because one enters the nursing home do not assume that you can’t save assets at that point.  That assumption is totally incorrect.

Medicaid Asset Protection

Medicaid Asset Protection from Nursing Home Expenses

One of the most often used techniques to protect assets for a single individual is the use of the “controlled gifting” technique. With this technique the higher the fixed income and lower the nursing home costs the greater the savings.  This technique involves controlled gifting and most likely the use of a financial power of attorney.  Where the financial power of attorney is insufficient (for a variety of reasons) court intervention may be the only method by which to protect the assets.

The amount of assets that can be protected may well be significant but is usually in the range of 40%-60% of the exposed assets.   This technique is complicated and must be done under the supervision of an elder law attorney familiar with this technique.

We often retain clients in situations where the client’s parent is in rehabilitation at a local nursing home.  Often, Medicare has just run out and the client just received the first nursing home bill equal to the current month and the next month.   Clients are often stunned and realize quite quickly that all of the assets will be gone very soon.   Using the “controlled gifting” technique even under this scenario may well be an attractive route to take to protect the assets at issue and to set them aside to pay for the wide range of items and services that Medical Assistance will not pay.  Remember, once on Medical Assistance, the recipient can only have $86/day for his/her needs.