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Q: Once I qualify for Medicaid, will the quality of care I receive
be sub-standard?
A: No. It is illegal for a facility to discriminate against someone receiving
Medicaid benefits. By law, Medicaid patients are to receive the same level of
care as private-pay residents.
Q: Is a married couple always required to spend down one-half of their
assets before qualifying for Medicaid?
A: Not always. In fact, often times couples have over $100,000 and qualify for
Medicaid benefits without spending a penny. Although there are income and asset
criteria a couple must meet before one of them qualifies for benefits, federal
and state laws were written to protect individuals from becoming impoverished
if their spouse needs nursing home care.
Medicaid planning is like tax planning in that legislation has provided legal
exceptions to the general rules that, with good advice from a knowledgeable
professional, can save Medicaid applicants and their families thousands of dollars.
Q: Is it true that under current Medicaid laws, a parent cannot make
financial gifts to their children once they have entered the nursing home?
A: No. In fact, a proper gifting program is a great Medicaid planning technique.
At the time an applicant applies for Medicaid, the state will “look back”
3 years to see if any gifts have been made. Any financial gifts or transfers
for less than fair market value during the three year look back may cause a
delay in an applicant’s eligibility. A proper gifting program requires
calculating the penalties prior to making gifts.
Q: Is $11,000 per year the maximum an individual can give away if they
are going to apply for Medicaid?
A: No. The $11,000 per year gift people ask about when discussing Medicaid Planning
is a tax law figure and not relevant with respect to Medicaid’s specific
asset transfer rules. The maximum monetary figure Medicaid applicants need to
concern themselves with is the “penalty divisor” for their state.
The penalty divisor is the state assessed average cost for nursing home care
by which the state assesses Medicaid penalties. The penalty divisor is $4,806
for Ohio.
Q: A Medicaid applicant’s house is considered “exempt”
under Medicaid laws. Can an applicant give their house away without incurring
penalties?
A: No. Any assets which are given away (personal property or real property)
are considered gifts. If an applicant gives their house away, the state will
assess a penalty based on the fair market value of the house at the time it
was transferred.
Q: Once my spouse is approved for Medicaid, can I gift my assets away?
A: It depends on your state’s laws. Currently, in Ohio, once the “institutionalized”
spouse has been approved for Medicaid, the “community” spouse’s
assets are no longer a part of the ongoing continuing eligibility and therefore
the community spouse may make gifts of their assets very carefully. But
always be very cautious as the rules change.
There are a number of steps a Medicaid applicant can take to preserve their
assets, ranging from gifting strategies, personal care contracts, annuities,
raising the Community Spouse Resource Allowance, etc. What you need to remember
is that the laws are constantly changing and the planning your neighbor did
for their mother six months ago may not be proper for your mother tomorrow.
Consult a knowledgeable elder law attorney for advice.
