Medicaid Myths and Truths
Article submitted by Marvin Dansky, a practicing attorney specializing in Elder Law, Probate, Estate Planning
and Nursing Home and Hospital Injuries.
For more information, he can be reached at 303-429-3518 or 1-888-337-5500 (toll free), or visit his website: www.danskyelderlaw.com.
Many people want to know when Medicaid will cover nursing home costs, which can cost over $50,000 a year or more. So, folks will ask friends and neighbors how to get Medicaid to pay the cost for nursing home care. Few attorneys know this area of the law. This is a complicated area and should only be handled by an attorney who knows Medicaid law.
There are some common "myths" that can get you in trouble. Often, they are somewhat correct, but mainly they are just plain wrong! This article won't go into great detail; you must consult an Elder Law Attorney about your own situation. The reader should clearly understand that the information set forth herein is not intended as legal advice. You should always consult an attorney of your choice.
Myth: "We have to give away everything I own to get Medicaid."
Truth: Basically, a married or single person is permitted to own some property. Married couples are treated differently in Colorado. The trick comes in what is "countable" and what is "non-countable" under the Medicaid rules.
Myth: "I can't give anything away and get Medicaid."
Truth: The Medicaid rules provide that a person can be penalized for giving away property, in some cases. But, a lot depends on how much is given away, when, and the date of the application for Medicaid.
Myth: "I have to wait 3 years after giving anything away, to get Medicaid."
Truth: The penalty isn't always 3 years, and sometimes there is no penalty at all. True, there is a 3 and 5 year "lookback" for some asset transfers.
Myth: "If I put my property into my spouse's name, I will be eligible for Medicaid."
Truth: Assets are counted, regardless of which name they are in.
Myth: "Medicare will cover my nursing home bill."
Truth: Medicare only covers a small amount of the nursing home care provided in this county. In general, there are 20 days of full coverage, if you go into the nursing home after at least three days in the hospital and you are getting skilled care (not intermediate level care). Then, if you still need skilled care, you can get up to 80 days of partial coverage from Medicare.
Myth: "If I enter a nursing home as a private pay resident, I must use up my assets before I can get Medicaid."
Truth: You are not required to exhaust your assets to private pay for the nursing home care. However, some nursing homes might try to make you believe that. Seek advice from an Elder Law Attorney.
Myth: "I can only 'spend-down' my assets on medical or nursing home bills."
Truth: See #6 above. Nursing homes may tell you that you have to spend your savings on the private pay rate, before applying for Medicaid, but this is not true.
Myth: "I can only give away $10,000 per year under Medicaid rules."
Truth: This is a rule under federal estate and gift tax law, not under Medicaid law. Actually, the gifting amount has changed to $11,000, for federal purposes. Right now, Colorado Medicaid law disqualifies a person from getting Medicaid for one month for every $4,424 given away for the year 2003. This penalty starts the month of the transfer.
Myth: "My wife is in a nursing home and will qualify for Medicaid. We both have Wills leaving everything to each other. I will leave everything as is. That's the right thing to do."
Truth: The husband's Will must be changed immediately. A Medicaid Will must be prepared for the husband. It is essential that the wife receive nothing absolute from the husband, since her inheritance from him may (and probably will) disqualify her from receiving Medicaid assistance.
Myth: "I can't transfer my house to my children because they may get in financial trouble, and I will be out on the street."
Truth: There is a way to give away your house and have complete control. Use of a Life Estate Deed to gift the house to the children with reserved powers in the parent prevent creditors of your children from claiming against the house. This Elder Law Technique reserves to the parent adequate controls during his or her lifetime, and avoids or reduces claims of the State of Colorado under the Medicaid laws.