Medicaid eligibility is subject to a complex set of rules including look-back, transfer penalties, and more.
Spending a lot of cash all at once or over time could prompt the state to request documentation showing how the money was spent.
Department of Public Welfare, July 18, 2000 Note: This document is meant not to give legal advice but only to answer certain frequently asked questions about how to protect assets from being wiped out to pay for nursing home costs.(See Elder Law Issues, July 10, 2000,.Another myth relates to Medicaids 36-month lookback rule (now 60-month as of 2016).You are not to rely on the limited information given here.Myths about Medicaid law abound.The result is the number of months during which you are ineligible for Medicaid.Next time well look at the Medicaid penalty period and the long-term impact it may have on your finances and the short-term impact it could have on your health care.Medicaid is different from Medicare (although many people, by mistake, refer to the two programs interchangeably.) Medicare is an entitlement program paid for through payroll withholding.
That myth seems to be slowly passing into history.
To some people, "penalized" means "punished as in committing a crime and being fined or even going to jail.
Under current rules, penalties incurred for asset transfers within the look-back period do not begin until either the day of the asset transfer or the date the individual moves into a nursing home and is found eligible for Medicaid whichever is later.
Joint accounts are the object of another myth about Medicaid law, and one that most Elder Law Attorneys who counsel in this area are familiar with.
No wonder, so many myths abound about the program, such as: To be Medicaid eligible, you have to sell your house or give it to the government.
Mom has a 50,000 certificate of deposit, says Daughter, but "my name is on the CD too she says.The article has been updated with 2016 statistics where indicated.Generally speaking, Medicaid is designed to pay for long-term care once the individuals funds and assets are extinguished.What does happen when a person gives away assets and applies for Medicaid is that Medicaid will impose a "period of ineligibility" as a result of the transfer.If you don't have documentation showing that you received fair market value in return for a transferred asset, you could be subject to a transfer penalty.So remember: the Medicaid look back period is five years from the date of application for Medicaid benefits, and any gifts or transfers made within that five year period are subject to penalty.At the time, the Dempseys countable assetsthat is, assets regarded as available to pay for nursing home caretotaled 404,630.In simple terms, if you have 200,000 in savings, you are expected to use those savings to pay for your care once your savings are gone, then Medicaid will kick.For example, pike place market gift baskets Robert Fleming, a Certified Elder Law Attorney in Tucson, reports on an Iowa case in which a caseworkers misinterpretation of the 36-month rule cost a family almost three years of nursing home care.In Tennessee, one month of nursing home care is 2572 (in 2016 this number had increased to 5472).Edward therefore applied for Medicaid for Eileen.For more on the gift tax rules, click here).
Under that law, Edward would have been allowed a maximum allocation of income of approximately 2000 a month.
Proper advice and planning is key to a healthy and financially sound future.