Common Medicaid Myths
Knowledgeable Brighton Medicaid Lawyers
When it comes to government programs for the elderly, many people falsely believe that Medicare covers all of a patient’s nursing home costs. In reality, it is actually Medicaid that covers this care. Unfortunately, getting Medicaid benefits isn’t always easy. The rules are often confusing and many of our clients believe the myths out there about who can actually qualify.
Below are some of the common Medicaid myths we often hear. To discuss your unique circumstances, contact our Brighton elder law attorneys at (810) 893-5277.
Myth 1: You must be completely destitute to qualify for Medicaid.
You don’t actually have to give away everything you own to get Medicaid assistance. You can still own property and keep “non-countable” assets. As an example, if a family member, such as a spouse or dependent children still live in your house, you don’t have to sell it. You may also keep your personal items, your car, prepaid burial contracts, and even some life insurance.
Myth 2: You won’t qualify if you give away your assets to family and friends.
While it’s true that transferring property or giving away assets can disqualify you from getting Medicaid, it really depends on the situation. A lot of it depends on the value of the property or asset, as well as who you are giving it to. In some cases, it may disqualify you for a period of time or it may not matter at all. Our Brighton Medicaid lawyers can discuss with you how this will affect you as it pertains to your particular situation.
Myth 3: You will face a five year waiting period for Medicaid if you give anything away.
In some cases, this may be correct. Medicaid rules may impose this penalty on some property transfers. Since the Medicaid agency will “look back” at the five years prior to you applying, you could have to wait for some period of time, although it may not be a full five years. If you believe that you may need to apply for Medicaid one day, Nawrocki Center for Elder Law, Special Needs & Disability Planning, PLLC can assist you with planning to help prevent penalties like this from occurring.
Myth 4: Medicaid will only look at your spouse’s property when they apply so you can keep any separate assets or inheritances.
Medicaid looks at both spouse’s assets when either applies. As mentioned above, there are some protections allowed for a spouse to remain in the home even if the other spouse is living in a nursing home. Since this is another complicated area of Medicaid, we can work with you to determine what is best for you and your spouse’s personal situation.
Myth 5: You can keep your property if it is put into your spouse’s name before applying for Medicaid.
The Medicaid agency will look at both of your assets, so it still applies no matter which spouse has their name on it.
Myth 6: Medicaid rules that applied to your neighbor will also apply to you.
This really depends on a variety of factors, but the most important thing to consider is when your neighbor actually applied for Medicaid. Medicaid rules have changed over the years and what applied to your neighbor may not apply to you. Your neighbor may also have a different financial situation than you do, so it is best to talk to a Brighton elder law attorney.
Myth 7: Your power of attorney can automatically take property out of your name, if you ever need to apply for Medicaid.
Generally, you must include a “gifting power” when you sign a durable power of attorney if you want them to have the ability to transfer assets to your spouse or children. We recommend discussing this with your attorney when you are considering long term care planning.
Myth 8: You must use up your assets before applying for Medicaid if you enter a nursing home as a private pay resident.
This is untrue for a couple of reasons. You are allowed to keep certain property, as well as non-countable assets. You may also transfer assets to your spouse or children. As a word of caution, some nursing homes may tell you that you have to remain “private pay” until your personal assets are gone because the rates patients pay are often higher than what they can get for Medicaid reimbursement rates. A Brighton elder care attorney can work with you to ensure that you are Medicaid-eligible.
Myth 9: You can only give away $14,000 per year under current Medicaid rules.
This rule actually applies to the federal gift tax rule, not Medicaid rules. Although you can give $14,000 to a person once each you without having to pay gift taxes, the gift could cause issues and trigger a penalty when the Medicaid agency does its look back.
We hope this has helped to debunk some of these common myths. We invite you to contact Nawrocki Center for Elder Law, Special Needs & Disability Planning, PLLC to learn more about Medicaid planning. Call us today at (810) 893-5277.