Medical Aid Elgibility Rules
Questions about Medical Aid Elgibility
1. Medical aid Misinformation - Medical aid provides identical care at the same facilities at a much lower cost to the resident. The majority of nursing home patients receive financial protection from medical aid. You do not need to be impoverished to receive benefits. A proper plan and implementation can preserve and protect almost any family’s nest egg.
2. Medical aid is state specific - There are major differences among the state laws regarding medical aid planning rules. Some state laws provide unique opportunities within the state that are not available elsewhere. Also, rules change over time so it is important to have the most recent information.
3. Assuming it is too early or too late - Some basic advance planning can provide vital protection later, so you really can’t be too early. However, it is not too late to act even if a person is already in the nursing home.
4. Going it alone - Maximizing medical aid planning opportunities is not something easily learned. No two situations are identical and strategies not implemented properly can cause denial of benefits. Seek qualified, professional guidance.
5. Gifting. Changing title to the home, transferring cash or assets of any type - It is important to plan and know the consequences of all transfers BEFORE taking action. Most people mistakenly feel they can make limited transfers without consequence. These uninformed financial decisions may result in extended periods of ineligibility.
6. Unused options - Not taking advantage of all spend down, conversion, transfer and exemption funding opportunities. How can funds be properly transferred? Is there a mortgage that can be paid off? Are there home repairs that can be made? Are there items that can be pre-paid? Has an irrevocable funeral arraignment been created and funded?
7. Not considering the consequences of financial transactions - The movement of money often creates issues with penalties, taxes and estate planning. These issues must be considered and coordinated with your medical aid plan.
8. Failing to take advantage of protections for the spouse - The law provides protections so the spouse of a medical aid recipient still living in the community does not have to be impoverished. Strategies are available to maximize this benefit.
9. Assuming medical aid caseworkers will help with planning - Except for some limited help with completion of the application, medical aid employees are specifically instructed not to advise clients on asset protection strategies.
10. Stopping the planning after approval - Not understanding post-medical aid consequences. What will happen when the medical aid recipient passes away? What happens when the community spouse passes away either after or before the recipient? What about the home? Most people feel medical aid frequently takes your assets and although medical aid is now more aggressively seeking repayment of benefits from beneficiary estates, proper planning protects most estates from this attack.
We also frequently see the same questions being asked by people interested in using medical aid to pay for the cost of long term convalescent care, medical caregivers, assisted living facility, and nursing home benefits.
Questions and answers:
Q. If you have too many assets to qualify, but need medical aid now, can you still protect any assets?
A. Yes, you can still protect the assets. While you may have lost the opportunity to use some strategies, it is never too late to protect most if not all of the remaining assets.
Q. If you give assets away do you have to wait 36 months to qualify for medical aid?
A. No. New rules effective in 2008 severely penalize you for making uncompensated transfers of assets. These rules will usually extend the look-back period to 60 months.
Q. Is the home counted as an asset?
A. There are limits. The home value may not be counted as an asset so long as the owner has an intent to return.
Q. When you die does the state take the house?
A. Not with proper planning. But if the house does not qualify as the “homestead” as defined by statute it could be taken by the state to recover money spent on your care in the nursing home after you die.
Q. What about the money in the safety deposit box, do you have tell anyone about it when applying for benefits?
A. Yes. You must disclose to medical aid all of your assets. Failure to do so is fraud. Always tell us about all the assets.
Q. Can your son take money out of your joint account without affecting eligibility?
A. No. Any transfer of assets from a joint account, regardless of who makes the transfer, will be considered a transfer.
Q. Can you still give $10,000.00 a year away?
A. No, not without it being considered a disqualifying transfer. Many people mistakenly believe that because you can give away $10,000.00 per person, per year, tax free, that this is the same case with medical aid. Unfortunately, it is not and the gift may be adverse to your eligibility.
Q. Do you get to keep your income if you are on medical aid?
A. No. You are required to pay to the nursing home your total monthly income, minus a small amount for personal needs. But, if there is a spouse, he or she keeps all of their income and may be entitled to some or all of the applicant’s income.
Q. Should you wait until you need medical aid benefits before seeing an elder law attorney?
A. No. Many of the options available to protect your assets are dependent on time. Therefore, the sooner you begin planning before the need arises the more options you have to preserve the assets.
Q. Once you are in a nursing home are there still planning options available?
A. Yes. There are multiple options available to preserve and protect assets.
Q. Do you need to have an elder law attorney help you qualify for medical aid benefits?
A. Only an elder law attorney can bring together the necessary medical aid planning, estate planning and incapacity planning skills to comprehensively solve the issues presented by a prolonged stay in a nursing home.
Congress recently changed the medical aid eligibility rules extensively!
Consider both State and Federal laws affecting medical aid:
Deficit Reduction Act
First Lawsuit Filed to Challenge Deficit Reduction Act
Deficit Reduction Act Challenged by Second Lawsuit
Medical Aid Handbook and Instructions
Is Medical Aid Dead?
Medical Aid Transfer Rules Could Punish Seniors
Be prepared for elgibility denial if you are applying for medical aid benefits to pay a nursing home. Politicians have not protected middle class seniors. They "reformed“ and restricted senior access to benefits used to pay for long term nursing care.
New legislation made fundamental and sweeping changes of medical aid programs. Nearly every applicant can be denied for medical aid, convalescent care, caregivers, and nursing home benefits.
Many more are now disqualified for benefits if they made any gifts prior to going into the nursing home. How long they would be disqualified depended on how much money was given away and they were disqualified for a penalty period (and when did the disqualification period start).
Under the law each and every gift a person makes for the five years prior to their entry into the nursing home will be added together as a “super transfer.” The person will be disqualified not from the date the transfer was made, but from the date they apply for medical aid after entering the nursing home. In other words, the penalty for giving something away is imposed when the person most needs benefits, when they enter the nursing home.
Medical aid rules include a "look-back period" for gift/transfers of five years.
Sometimes, the exact language of the law states that the state “be named the remainder beneficiary in the first position for at least the total amount of medical assistance paid.” The home is included in these attacks.
The law has drastically changed the landscape of medical aid, but there still remains many solutions to solve these seemingly unsolvable problems. Despite the complicated laws, proper planning and guidance medical aid will still remain a viable method to pay the expense of nursing home care.