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