MEDICAID ADVISOR
Filing for Medicaid BY COLIN SANDLER
In theory, people should be able to apply for Medicaid without hiring a professional. However, doing so requires a good understanding of all the nuances of Medicaid eligibility. Trying to go it alone can be financially devastating.
else. Usually, people are advised to cash out the policy. However, cashing out means Cheryl would lose the value of the life insurance that would have gone tax-free to her beneficiaries. An alternative to would be to take a loan against the policy, prepay any funeral arrangements, and any money remaining would go towards the $15,0 Cheryl is allowed to keep or would go to the nursing home towards her cost of care. Once the cash value is lowered below the MedicWhen you are admitted aid threshold, Cheryl can keep the to a nursing home for policy and her beneficiaries would a long-term placement, still benefit from the payout upo you should immediately her passing. Although the payout explore your options for CASE STUDY 2: may be reduced by the loan, they Medicaid, even if you Barbara enters a nursing home and still haven'tlostthewholevalueofthepoli do not think you can qualify. People often has a significant amount of money in her relyonthenursinghome’sfinance-depart name. Her family believes they have to ment to help them through the application CASE STUDY 4: continue to pay the home until all of Barprocess. They can do that but it is not the John is admitted to a nursing home. He bara’s funds are spent down. They may home’s role to help you with any asset has property as well as assets in the not realize that she can pre-pay an irreprotection. And if they know about any bank. Upon discussion with his family, we vocable burial fund for herself and for her transfers of assets, they may simply say learned one of the adult children is collectchildren without incurring a penalty peyou do not qualify. But what if this isn't ing Social Security disability. This adult riod. Also, they may not know about a gift necessarily the case? child is not accessing any government note strategy which allows you to protect entitlements (i.e.; Medicaid, food stamps, between 40 to upwards of 50 percent of CASE STUDY 1: etc.). A transfer of assets to an adult disremaining funds. This strategy has to In the five years prior to nursingthe home abled child does not have any penalty placement, Martin had given money to be implemented immediately upon ad- period and is an acceptable transfer. Askhis grandchildren to pay for college. But mission. It cannot be done once the funds ing one simple question could change the he gave the money to the parents of his have been spent. disposition of all your assets from going to grandchildren, and did not pay the college the nursing home to going to your child. directly. When Medicaid reviews his - CASE finan STUDY 3: cial statements, they are going to see gifts Cheryl didn’t have any assets to speak As illustrated in the cases above, a Medgiven to his children. Ultimately, Medicaid of when she was admitted to the nursing icaid specialist may be able to provide does not care about the purpose of the home but she does have a life insurance options for protecting assets should a gifts, and they will penalize for transfers of policy with a $150, death benefit and nursing home placement occur. If any assets. A penalty for asset transfers means a cash value of $30,. She cannot own assets can be protected, you should Medicaid will deny coverage for a period of a life insurance policy with that much cash know about it as soon as possible in orvalue and qualify for Medicaid as the cash time consistent with the funds gifted. value counts as an asset. Once admitted der to implement allowable strategies. n n n This issue often happens when people tothenursinghome,it'stoolatetotransfer Colin Sandler, LCSW, CCM, is the ownership of the policy to somebody give gifts according to IRS guidelines, which allow what people think is a permissible tax free gift per year (i.e., $15,0). However, Medicaid does not follow the IRS guidelines and will in fact count this as a transfer of assets.
Colino-ersFREEweeklyseminars on Community Medicaid and Nursing Home Medicaid via Zoom. Please check MedicaidSolutions.com for information and registration.
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the owner of Medicaid Solutions and has been providing advice on aging to seniors and their families for over 20 years. Call 914-9242566 or email Colin@Medicaidsolutions.com; 2127 Crompond Rd, Cortlandt Manor, NY.
winter 2021-2022
