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.