In past newsletters, I have written about the dangers of filing a Medicaid application without any idea of how the Medicaid rules work. With the average nursing home expense exceeding $7,000 per month, any mistake can be very costly. Nonetheless, I am often told by folks that they intend to file the Medicaid application themselves or that the nursing home said they would help them fill it out. If only it were so simple – just filling out an application. Lately, however we have heard from a number of people who filed Medicaid applications on their own (even with help from the nursing home) and were denied Medicaid benefits with no means to pay for the care.
It is a disturbing trend, but it can’t be ignored. With the Medicaid rules becoming more and more complex, it is increasingly difficult to qualify someone for Medicaid. For example, just in the past year the Department of Human Services (DHS) has made several rule changes including:
1. Implementing estate recovery.
2. Modifying the homestead exclusion.
3. Modifying the vehicle exclusion.
4. Modifying the divestment rules.
Often when I explain to someone how confusing the Medicaid rules can be; such as how the Medicaid penalty works when someone has given money away, the response I get is: “no problem, Mom never had very much money so it won’t be an issue.” Just recently however I met with someone who filed a Medicaid application by himself because he figured it would be easy since his mother had “next to nothing”. After filing the Medicaid application, he realized he had completely forgotten that his mother had given her car away 3 years ago. Now he is rightfully worried that his mother will be denied Medicaid benefits and he will have to pay for her care during the divestment penalty.
As I have said once before, even well intentioned families can end up with disastrous consequences that could easily have been avoided. You cannot simply walk into the DHS office with your loved ones bank statements and say “please give my mom (or dad) Medicaid”. You have to be prepared and be able to respond to the inevitable questions. In many ways it’s like an IRS tax audit. You would be crazy to walk into the auditor’s office without your CPA or tax attorney. The same principle applies with Medicaid – the stakes are simply too high.