Top 5 Medicaid Myths

1. “I have too many assets to qualify for Medicaid”

TRUE for Nursing Home Based Medicaid, FALSE for Home Based Medicaid with some preplanning:  True that the maximum amount of non-exempt assets you can have to qualify for Medicaid is $13,800, however, if you are applying for home care based Medicaid; there is no look back penalty period.  Since Medicaid does not look back for any transfers of assets means that you can transfer as much money as you want and still be eligible for Medicaid benefits; even if it is $1 million!

2. “I can save half of Mom’s assets by placing my name on her bank account.”

FALSE:  Joint accounts that have the Medicaid Applicant’s name on them are assumed to be 100% owned by the applicant.  In most situations this is true, but if money was contributed to the account by the non applicant, and they can prove it, Medicaid will only count the Applicant’s portion towards the $13,800 resource level.

3. “Medicaid will place me in the worst nursing home.”

FALSE:  While Medicaid has the ability to place a person in a nursing home within a certain radius from their permanent residence, they rarely do.  Many times, the nursing home is pre chosen by the family before the Medicaid Award has been granted.

4. “Medicaid will allow me to give away $10,000 to $13,000 per year to family members prior to applying for benefits.”

FALSE: Any transfers made without getting equal value back (i.e. gifts) can evoke the Medicaid Penalty of denying benefits for 1 month for approximately every $10,000 transferred within a 5 year period prior to the application for Medicaid nursing home benefits.  The Internal Revenue Service allows people to gift up to $13,000 per person, per year without recording the event and without reducing your $1 million lifetime gift tax exemption.  In this instance, Medicaid and the IRS rules are completely independent of each other.

5. “If I receive Medicaid benefits for nursing home care, when I die, Medicaid will force the sale of my home and my spouse will be left on the street.”

FALSE: While Medicaid can place a lien on a decedent’s estate, it will be held in abeyance so long as a living spouse resides in the home.  Upon the spouse’s death, Medicaid can place a lien on the estate.