Medicaid Pitfalls

1. Thinking it is too late to plan
It is not too late to plan for Medicaid, even after the individual has entered a nursing home. In fact a majority of our clients, or their agents, do not begin planning until after their loved one has entered a nursing home. Even if their assets are minimal, we can assist clients in determining which assets to keep and which assets to liquidate, assist them in contacting life insurance companies and banks to obtain assets values, and assist them in completing the Medicaid forms.

2. Thinking it is too early to plan
It is never too early to begin thinking about the cost of long-term care and how one will finance such care if needed. There are several things that can be done before an individual becomes nursing home eligible, such as purchasing pre-paid funerals, purchasing long-term care insurance, executing a caregiver agreement with a child that is providing services and/or executing a power of attorney that allows for gifts and Medicaid planning. Additionally, Medicaid planning in anticipation of admission within a short period of time can maximize the resources that are retained by the community spouse.

3. Gifting too many assets
Our primary concern for all of our Medicaid clients is to ensure that the nursing home spouse retains adequate funds to pay for nursing home care and that the community spouse retains adequate funds to take care of her/himself. Without proper planning, individuals may jeopardize their own lifestyles by gifting too much to their children too early, only to find that they never require nursing home care or that they have not retained sufficient funds to meet the ineligibility period.

4. Failing to maximize the resources retained by the spouse
Generally, the community spouse is entitled to one half of the couple's countable assets, up to a maximum amount that is set by the State each year. Often, however, the community spouse is also entitled to a portion of the nursing home spouse's monthly income and/or additional assets when the community spouse's income is insufficient to meet minimum living standards. We consider several factors, such as age and health, to determine the best method to maximize the resources retained by the community spouse.

5. Applying for Medicaid too early or too late
Submitting the Medicaid application too early may result in an extended period of ineligibility. Submitting the Medicaid application too late may result in the use of exempt funds to pay nursing home expenses that would have been covered by Medicaid. The timing of the application is critical and most clients are unaware that benefits can be paid retroactively for up to three months prior to the application.