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

Steps to Take for Transfers that Initially Would Appear to Give Rise to a Medicaid Penalty

Steps to Take for Transfers That Initially Would Appear to Give Rise to a Medicaid Penalty

1. I have seen many situations in which a parent has transferred virtually all of his or her assets to a child. If such parent goes into a nursing home within 60 months, there is a possibility of a substantial period of ineligibility.

2. One ameliorating possibility is that all transfers utilized by the child on behalf of the parent do not give rise to a penalty. The problem with such approach is that if a parent goes into a nursing home and funds are remaining, funds that have not been utilized for the parent are treated as uncompensated transfers.

3. If a transfer is made to a child and a parent goes into a nursing home very soon thereafter, the monies can be returned to the parent either directly or through a power of attorney. That is, any monies returned undo the transfer.

An interesting example would be the gifting of a home by a single parent to a child. If the parent goes into a nursing home more than 60 months after such gift, the gift would not be subject to penalty. Of course, the child’s basis (cost) becomes the basis of the parent.

A more interesting example is the parent giving the home to a child (or possibly two children) and the parent goes into a nursing home four years later. A possible planning technique would be for the child or children to pay for the nursing home for the remainder of the 60-month period.


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 #18