Michael’s mother, Lucille, fell at home and wasn’t found for several days. He consulted with doctors about his mother’s care and was told she needed 24/7 nursing care. As he started researching nursing homes, Michael learned that the typical cost of a nursing home in Alabama is $6,000 or more per month. Worried that Lucille didn’t have the money to pay for a nursing home, and knowing that he didn’t have the means either, he started looking for other options to pay for her care. Michael decided it was time to start Medicaid planning immediately. What he learned puzzled and concerned him. Michael wished he had asked himself the question, “Should I wait until I need nursing care?” a lot sooner.
Medicaid Eligibility
Medicaid is a federally-funded program to help people with certain medical costs. The program is actually administered by state agencies like Alabama Medicaid.
But not just anyone can get Medicaid.
People have to apply and submit lots of supporting documentation. A caseworker reviews the application and documents, then determines whether the applicant is truly eligible for Medicaid benefits. Many people are not.
Medicaid looks at income and resources for more than a few months or even a year. In fact, Medicaid employs a long “look-back period.”
What is the “Look-Back Period.”
This is a five-year period prior to the application date. All financial transactions made during the look-back period are reviewed, no matter how big or small. Certain situations may cause problems for applicants, including:
- Asset transfers for less than fair market value. Example: Lucille transfers ownership of her house to Michael or sells it to him for less than it’s worth.
- Gifts, including charitable gifts. Example: Lucille suddenly gives her grandchildren up to $15,000 each. She also gives her church, the local SPCA, and the town historical society large donations.
- Random Payments to Caregivers. Example: Lucille paid someone to help her without having a written agreement about the services provided.
- Loans to Family Members. Example: Michael and Lucille decide to “lend” several family members large amounts of money without having formal loan agreements.
Some transfers typically will not cause any problems with a Medicaid application if made to:
- The applicant’s spouse. Example: Lucille is widowed. If she were married, however, she might be able to transfer some of her assets to her spouse or her spouse’s caregivers.
- A child with special needs. Example: Lucille’s daughter, Roberta, has cerebral palsy. Lucille may be able to transfer money to Roberta, her caregivers, an ABLE account, or a special needs trust set up for Robert’s care.
Transactions occurring during the look-back period may trigger a penalty period. The amount of the transactions may be deducted from Medicaid benefits.
Medicaid Eligibility is Complicated.
The first question of this blog was: “Should I Wait Until I Need Nursing Care?”
And the answer is, “No.” Whenever possible, Medicaid planning should begin well before you start the Medicaid application.
Does this mean your situation is hopeless if you waited too long? No, an experienced elder law attorney may be able to help you minimize the damage and become eligible as soon as possible.
We Can Help with Medicaid Eligibility Concerns.
The attorneys at Miller Estate and Elder Law know how to assist you with your Medicaid application and eligibility planning. We have helped many families just like yours save thousands of dollars and get qualified for Medicaid. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
