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, though there’s a lot to consider. Gathering and accurately presenting five years of financial information is crucial to avoid penalties or denials. Losing Medicaid coverage for a nursing home costing over $12,000 a month can be devastating.

Determining Eligibility
We’ll determine your Medicaid eligibility and discuss spenddown alternatives if you exceed the asset limit. Many mistakenly believe they aren’t eligible until they’ve depleted their life savings. A Medicaid planner helps you avoid costly missteps.

 

Medicaid Lookback

Medicaid’s lookback period is five years in most states, but only 30 months in California. Medicaid examines past transactions to ensure assets weren’t given away to meet eligibility requirements. Many rules determine whether a transaction counts as a divestment. Divestments include gifting assets, selling below market value, or buying above market value.

Medicaid Divestments
If Medicaid identifies a divestment, they’ll delay eligibility as a penalty. The applicant must pay privately until the penalty period expires.

 

 

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

Calculation of Medicaid Penalty
For 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 would result in a two-month delay of Medicaid benefits.

Medicare and Medicaid are different programs. 

What is Medicare?

Medicare is a health insurance program that covers nursing home care after a qualifying hospital stay.  It fully covers the first 20 days, then requires a co-payment for the next 80. 

Coverage continues only if the person’s condition improves to their pre-illness level.  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 families don’t know about these protections and unnecessarily deplete assets before applying for Medicaid.

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.