Medicaid is a federal-state government social insurance program dedicated to providing health care and full nursing home care to persons showing financial and medical need. To become eligible for Medicaid nursing home benefits, the disabled person must be unable to perform a specified number of daily activities and have a medical condition requiring long-term elder care.
The disabled person is required to spend down almost all of their available assets before Medicaid nursing home benefits are available. Most marital assets and other sources of income must also be expended on the care of the disabled spouse before Medicaid nursing home benefits are available.
A second Medicaid issue is the look-back and penalty periods for transferring assets in advance of applying for Medicaid nursing home benefits. Medicaid captures any transfers below fair market value made by the applicant to any person or organization for the five years prior to the Medicaid application date. The penalty period is the span of time in which the disabled person will be ineligible for Medicaid – after the application for benefits has been filed! The penalty is expressed in months and is determined by dividing the cumulative gifts during the look-back period by the average monthly private nursing home cost in the state.
A final Medicaid nursing home pitfall to consider is estate recovery. Medicaid law requires that the state welfare department must attempt to recover as much of the Medicaid nursing home costs as possible from the heirs of the disabled person. This can result in the forced sale of inherited assets such as the parents’ home or an IRA account to repay the parents' Medicaid bill.
Seek the professional counsel of a competent elder law attorney to understand the complex rules associated with Medicaid nursing home benefits and eligibility.
