FAQs

Why should I hire Fieldstone Medicaid Planning? Can't I just do this on my own?

The Application Process

You can fill out the Medicaid Application yourself, although there are many factors to consider.  Gathering, organizing and presenting five years of financial information accurately is crucial to avoid penalties or denials.  Losing Medicaid coverage for an nursing home that costs over $15,000 a month can be devasting.

Determining Eligibility

We will determine your Medicaid eligibility and discuss spenddown  alternatives if you exceed the asset limit.  Many are under the misconception that they aren’t eligible for Medicaid until they have depleted their life savings.  A Medicaid planner with a deep understanding of the Medicaid rules can help avoid missteps that lead to ineligibility and financial loss.  

Medicaid Lookback

The lookback period for Medicaid is five years in most states, except in California where it is 30 months.  Medicaid examines past transactions within the lookback period to ensure assets weren’t given away to meet the eligibility requirements.  There are many rules that determine whether a transaction is considered a divestment in the eyes of Medicaid.  Divestments include gifting money or property, selling an asset for less than market value, and buying an asset for more than market value.

Medicaid Divestments

If Medicaid identifies a divestment, they will delay eligibility as a penalty.  This means the applicant must pay privately until the penalty period expires.

Medicaid Penalty

A Medicaid penalty is imposed  an if applicant gifts assets during the lookback period to gain eligibility.  The penalty delays eligibility and is not a monetary fine.  The penalty is calculated by dividing the gifted amount by a penalty divisor, which varies by state. 

Calculation of Medicaid Penalty

As an example, consider a Medicaid applicant who gifted a car valued at $10,000 to her granddaughter.  If the penalty divisor in her state is $5,000,  this action would result in a two month delay of Medicaid benefits.

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Medicare and Medicaid are different programs. 

What is Medicare?

Medicare is a health insurance program for nursing home care after a qualifying hospital stay, covering  the first 20 days fully and requiring a co-payment for the next 80 days. Coverage only continues if the person’s condition improves to the level he or she was at before the illness occurred.  Unlike  means-tested programs, anyone can qualify for Medicare regardless of income.

What is Medicaid?

Medicaid, on the other hand, is a long-term care payment source for those who meet specific eligibility requirements.  It covers expenses for nursing homes, assisted living facilities (not all states) and home care.  To qualify for Medicaid, a person’s assets and income must be below certain thresholds.  Lastly, Medicaid will seek reimbursement of the benefits paid after the recipient passes away through estate recovery.

This is a common area of confusion.  The IRS gift exemption, which addresses income tax thresholds for gifts, is independent of Medicaid guidelines.  Therefore, a gift that complies with IRS guidelines might be considered a penalty-causing divestment by Medicaid.

Medicaid has rules that are designed to ensure that the spouse of a Medicaid recipient does not become impoverished.  The allowable asset limit is much higher when there is a “community spouse”, although these limits vary by state.  Many are unaware of these protections and, unfortunately, apply for Medicaid after they have unnecessarily depleted their assets.

Your primary residence is exempt from the asset calculation if your spouse continues to live there.  If you are single, your residence is exempt if you intend to return home.  If you don’t intend to return home, the state will anticipate the sale of the property. 

No.  There’s a misunderstanding that Medicaid recipients receive a lesser quality of care than nursing home residents who pay privately.  There are regulations in place to ensure that this does not happen.  Nursing home caregivers are not aware of a patient’s payer status and the treatment is not any different.