The Importance of a Carefully Prepared Transmittal Letter

Accompanying any Medicaid application should be a transmittal letter which serves as a map to the County Board of eligibility. The purpose of the transmittal letter is to avoid delay in time and confusion regarding eligibility, purposes of transfers and matters such as accounts closed out within the relevant look-back period.

In my transmittal letter, I initially set forth the documents listed by the respective County Boards. I also enclose any information or documentation you need for the case such as Caretaker Agreement (agreement pursuant to which applicant compensates child for previous services, see Post 17).

The second portion of my transmittal letter sets forth the monthly statements of any current accounts for the applicable time period. Currently, County Boards are looking at statements from the date of eligibility back to February 2006, which is the month of adoption of the Deficit Reduction Act. Of course, documentation must eventually be supplied for the anticipated eligibility date. Generally, an application is submitted prior to the eligibility date. However, if an individual is eligible prior to the submission of the application, eligibility can be retroactive for three months.

I then set forth in a separate folder the current assets of the applicant.

It is particularly important to show closed out accounts back to February 2006. Although I title such portion of my transmittal letter “closed out accounts,” the meaning is broader. Firstly, any closed out account should trace the proceeds of such account (i.e. another account of the applicant, an expenditure or a gift). Other closed out assets and the disposition of such assets during the look-back period would include, but not be limited to, IRA’s, sales of stock, payments pursuant to a caretaker agreement, sale of a residence, surrender of life insurance, monies expended on an excludable resource such as a home, etc.

Of course, if there is a community spouse, I enclose a separate folder showing the computation of the community spouse resource allowance. This separate folder would include all includable resources as of the first day of the first month of institutionalization. The period of institutionalization would include both the nursing home and a prior stay in a hospital if relevant. With respect to the community spouse resource allowance, see Post 8.

The initial transmittal letter should include sufficient information so that all that is necessary to provide at the date of eligibility, are subsequent statements of the applicant and/or spouse through the time of eligibility.

There are several posts which are relevant to the final time period between submission and the eligibility date. If submitting a transmittal letter, it is suggested that these posts be reviewed:

1. Post 4 – Significance of Payment of Debts and Expenses.
2. Post 5 – Accelerating the Date of Eligibility.
3. Post 7 - Rules of Medicaid Eligibility.
4. Post 8 - Community Spouse Resource Allowance.
5. Post 10 - Significance of the 90-Day Rule.
6. Post 16 - Qualifying for Medicaid.
7. Post 20 - Importance of Liquidating Assets in the Medicaid Planning Process.
8. Post 25 - Date of Application Could Be Fatal.
9. Post 31 - The Problem of Recurrent Disqualification.
10. Post 33 - The Problem of the Working Spouse.

In addition to supplementing the initial transmittal letter, projections should continually be made of the anticipated date of eligibility. With respect to this issue, pension and social security of a spouse or both spouses should be reviewed as should nursing home bills which delineate not only the cost of the nursing home (invoice generally covers subsequent month), but also expenditures such as medicines which a nursing home generally invoices for the prior month.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© April 2009, Post 67

Rules Often Overlooked in the Medicaid Application Process

Very often an apparently complete application is submitted to Medicaid with the appropriate documentation described in the transmittal letter. However, there are some simple rules that are not always followed that can delay Medicaid eligibility. These rules are discussed briefly below:

1. The prepaid funeral arrangements must be irrevocable. Very often applicant has purchased burial insurance years ago which is in revocable form. This is not acceptable to Medicaid. The solution is to convert the policy to irrevocable. It is extremely important to work with an experienced funeral director.

2. The exemption for the home for an applicant and a community spouse relates to the Primary Residence. A secondary home is an available resource. Similarly, if the primary residence of the parties is an apartment and they have a separate house, this house does not constitute the primary residence.

3. The individual resource requirements of $2,000 for an individual of modest income and $4,000 for an individual meeting the income cap of $2,022 must be met exactly on the first day of the first month for which Medicaid is sought. Resources of $2,001 does not mean that the individual misses by a day, but rather does not qualify for Medicaid until the resource limit is met. Therefore, carefully monitoring all checks during the last several months is a necessity.

4. Nursing homes often ask for a deposit upon entry. The typical deposit is two months nursing home costs. Therefore, if an individual and/or an individual and a spouse meet the applicable resource requirements (see Post 7), a deposit of two months will delay the letter of eligibility until the deposit is utilized. One reason for this approach is that the deposit until used constitutes a resource. Another reason is that the nursing home cannot receive private pay from the family and also receive the Medicaid reimbursement rate. Keep in mind in analyzing the effective date of Medicaid eligibility that pension and social security should be considered.


Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© April 2009, Post 66