Qualifying for Medicaid

Qualifying for Medicaid

Ideally, representation for Medicaid eligibility should commence at least six months prior to the anticipated date of eligibility. Proper planning should result in the protection of resources, and, in many cases acceleration of the date of eligibility.

I. The General Problem

Counsel is engaged to represent an individual who recently entered a nursing home. Resources may include bank accounts, securities, E bonds, IRAs, life insurance policies and/or a residence. Individual may have current debts, such as doctor bills and credit card charges, and anticipates future debts, such as nursing home costs and income tax liabilities.

Topics which have been previously covered include the following:

1. Life insurance (Post #3)
2. Residence (Post ##6, 11 and 14)
3. Payment of Debts (Post #4)
4. Acceleration of Date of Eligibility (Post #5)

II. Priority of Payments

A. Debts, nursing home costs, the acquisition of excludable resources (such as burial arrangements) and income tax liabilities are the major expenditures incurred during the spend-down period. Debts should be paid immediately and expenditures paid as incurred with an eye toward the goal of meeting the resource requirement on the first day of the projected month. As indicated above, failure to meet the resource requirement by even a minimal amount requires that payment be made at the private rate until the resource requirement is met.

B. Projecting the date of eligibility is not an exact science as circumstances may require a revised eligibility date. On the expense side of the ledger are costs such as increased nursing home charges for a given month and unreimbursed medical bills. On the asset side of the ledger are receipts such as medical reimbursements and income tax refunds.

C. Maintaining an element of flexibility in making payments is the key to establishing a projected date of eligibility.

Example: Applicant is seeking July 1, 2009 eligibility. The resource requirement is $2,000. There is no deposit at the nursing home. All debts and expenses (including prepaid funeral arrangement of $5,000) have been paid. On June 25, applicant has $4,000 in resources. If funds not reduced to $2,000 on July 1, eligibility will be denied.

Contrast: Facts same as above except funeral costs have not been paid. Resources are, therefore, $4,000 (original June 25 balance) plus $5,000 (monies set aside for funeral, but not paid), or $9,000. Funeral arrangements should be made so that the cost is at least $7,000.

Rule: Prepaid funeral arrangements should be one of the last expenditures prior to the anticipated date of eligibility. The inherent flexibility in the amount of this payment allows for the resource requirement to be met.

D. One of the first liabilities to be determined and paid is state and federal income taxes. As indicated herein, failure to address this issue could result in delaying the date of eligibility, or even worse, could result in a liability when no monies are available or in payment from community spouse’s protected funds.


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


© March 2009, Post #16