Medicaid Eligibility before a Favorable Determination

Medicaid Eligibility Before a Favorable Determination

Ideally, an application should be submitted several months before eligibility and updated each month until qualification. Under such a fact situation, the issuance of an eligibility letter is predictable. However, the statements may not reflect the amount actually in an account as a check written before the first of the month that has not cleared (see Post 4). Medicaid will issue an eligibility letter retroactive to the application date in such a case.

A more problematic situation is eligibility is met on the first of the month, but Medicaid does not process the application for several months. In such case, the date of eligibility is retroactive to the date that an individual is actually eligible rather than the date that Medicaid reviews the papers and has been dilatory in coming to this conclusion.

Once an applicant has been advised by counsel that he or she is eligible for Medicaid, no further payments are to be made to the nursing home regardless of whether the actual eligibility letter has been issued.

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


© June 2009, Post #39

Transfer of Home to Caretaker Child - Revisited

Transfer of Home to Caretaker Child - Revisited

Post 6 stresses that property owned by applicant residing with a caretaker child is to be transferred at time of application for Medicaid. The article suggests that a current power of attorney be drafted so that if the applicant is incompetent at the time of application, a power of attorney can be used to transfer the residence to the caretaker child.

This is an example of tailoring the power of attorney for a client in an elder law situation.

That is, the power of attorney should be provide that in the event an applicant is in a nursing home and an application for Medicaid is submitted, approval by the Medicaid authorities that the child has provided the requisite care for two years is necessary before the property is transferred.

If the applicant is incompetent at the time, the power of attorney can accomplish this result.

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


© May 2009, Post #37

Sale of Remainder Interest

Sale of Remainder Interest

The technique discussed in this article is another planning idea for a single individual owning a home and living with a child. However, the child has no special status such as having provided care or being dependent. The potential applicant has been advised to have private funds approximating one year’s nursing home costs to provide flexibility in choice of facility. Protection of the home is desired.

Recommendation: Remainder interest should be sold to child. The tables for determining the remainder interest can be obtained from your Medicaid office.

The transaction results in the parent having retained a life interest in the property and the child having purchased the remainder for an assumed amount of $60,000. Consequences are as follows:

A. there will be no transfer penalty;

B. applicant will be eligible when resource requirement is met;

C. eligibility can be accelerated by the payment of debts and the acquisition of excludable resources;

D. the retained interest of the parent (i.e. life estate) has special administrative treatment by the State of New Jersey (no value assigned to retained interest, retained interest not subject to Medicaid lien).

Note: If remainder interest were deeded to a “protected transferee,” there would be no period of ineligibility with respect to the transfer (see Post 6).

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


© May 2009, Post #36