The Medicaid application process can be tedious and overwhelming. You can save time, money and energy by avoiding the ten biggest mistakes that Medicaid applicants commonly make:
- Not speaking with an elder law attorney
Applying to Medicaid without talking to an experienced elder law attorney can impact an applicant’s effectiveness in proving Medicaid eligibility. An elder law attorney’s responsibilities include keeping up with and understanding the complicated Medicaid regulations and to guide clients through the process. Even a single consultation with an elder law attorney can provide key guidance – whether or not you hire the attorney to complete the application process.
- Gifting away resources
Some people believe that giving away their resources to their children or others will make them eligible for Medicaid. Unfortunately, Medicaid law places significant restrictions on making gifts to attempt to qualify for Medicaid. Giving away resources can result in a penalty imposed by Medicaid which must then be paid before qualifying for Medicaid benefits. Speaking with an elder law attorney before making any resource transfers is critical to avoiding a Medicaid penalty.
- Failing to provide the right documentation
Medicaid applications require specific documentation, and a lot of it. It is imperative that an applicant provides specifically what is requested. Failing to do so can result in denial or delayed approval of the application.
- Not properly spending down resources
Medicaid allows applicants with excessive resources (resources above the qualification limits) to conduct an asset “spenddown” before applying for Medicaid. A spenddown can include paying off debt, purchasing a funeral trust, or buying a new vehicle. Conducting a proper spenddown will speed up the time the applicant is eligible for Medicaid. But if the spenddown is not completed properly, the spenddown itself can result in a Medicaid penalty.
- Applying for Medicaid too early
For every applicant, there is a perfect time to submit the application. This time is dependent on the applicant’s circumstances and can be calculated by an elder law attorney. Applying too early can result in denial of the application and being forced to repeat the process, which just costs time and money.
- Applying for Medicaid too late
Waiting too long to apply for Medicaid results in spending more resources than is necessary. Applicants should think about applying for Medicaid upon admission to a long-term care facility if they don’t already have a Medicaid plan in place. An elder law attorney can create an eligibility plan to save resources that may otherwise be used to pay for long-term care.
- Failing to disclose resources
Failing to disclose resources to Medicaid is considered fraud and can result in prosecution. Even if the applicant was simply negligent or forgot to list assets, the failure to disclose could be viewed as fraudulent. Therefore, applicants must disclose all resources to the applicant’s attorney and to the Family Social Services Administration (“FSSA”).
- Failing to plan for post-approval
Approval of the application is not the end of the Medicaid process. Recipients of Medicaid benefits must continue to stay eligible (and be able to prove continuing eligibility) by monitoring resources, managing income, and notifying the FSSA of changes. Understanding post-approval duties is vital to maintaining eligibility.
- Failing to pay the applicant’s Medicaid liability
Many applicants think that, once they obtain Medicaid approval, they do not have to pay for any part of their long-term care costs. However, most Medicaid recipients must still contribute towards payment of their long-term care costs even after receiving Medicaid eligibility. The portion the applicant must pay is referred to as the applicant’s “liability”. The liability is calculated based on the recipient’s income and expenses. The liability amount must be paid to the nursing home each month.
- Taking wrong advice
Many people have advice on how to become eligible for Medicaid – usually based upon the experience of a relative or friend. While their intentions may be honorable, that advice may not always be accurate or applicable. Each person’s road to eligibility is different and depends on that person’s unique circumstances. Applicants should rely on the advice of an experienced elder law attorney to evaluate the applicant’s needs for creation of a plan specific to those needs.
Amy J. Osborne is an elder law attorney with the firm of Allen Wellman McNew Harvey, LLP, and she regularly assists applicants with every part of the Medicaid application process. To schedule a consultation, contact Amy or one of our experienced elder law attorneys at (317) 462-3455.