Get ready for a wild ride when filing a NJ Medicaid application

Growing old doesn’t mean that people stop taking care of their family members and think only about themselves. Families expand. Children may enter second marriages. The grandchildren get married. A child  may run into financial trouble, lose their job  or become medically disabled. Loving families support each other and that often means that people will share their home with the next generation and financially assist them. A retiree may still be supporting a child who never quite made it on their own or can’t quite afford to raise his own children. All of this support may be a “gift,” but people aren’t thinking about eventual Medicaid eligibility.

Children are often supporting their parents who have run out of cash. There might be an unwritten understanding that “when the house sells, I’ll pay you back.” They may or may not keep track of all these expenditures and loans. In some cases, children may be doing all the purchasing for the infirm parent — they may put all the purchases on their own credit card (to get the points) and be periodically repaid by a parent. All of this support may be a loan, but people aren’t thinking about how Medicaid will look at the use of the parent’s money to pay them back.

People spend their money in a way that meets their needs, and normally don’t have to account to anyone about what they do. But when the aged person has to apply for Medicaid to pay for their nursing home care or home care (or assisted living), every single financial transaction of the prior 5 years is put under a microscope. And from the time the application is filed, they may only give the applicant 90 days to produce 5 years of account statements and cancelled checks, and all the scraps of paper necessary to explain every check, deposit or cash withdrawal. It can be an impossible task, and the law puts the burden on the applicant. When the person compiling the documentation is a third party who wasn’t involved — a niece, or a stand-by agent under power of attorney who now has to step in because the applicant can’t function any more — they may have absolutely no idea what the applicant was doing with his money or why he was in the habit of going to his ATM and taking out $750 in cash twice a month.

Take a look at this sample of the kind of questions that were asked on one particular Medicaid application. This is very typical. Oftentimes, the person filing the application (next of kin) has no idea what the answers are.     Sample Verifications Request from caseworker              And if the applicant can no longer remember, what’s to be done?

Sure, it’s important for aging people to retain their documentation for at least five years, keep things organized and have a paper trail, and it’ s important for people to have their lawyers create documents to confirm a financial arrangement. However, it’s equally important that government agencies which are performing the administrative task of evaluating Medicaid eligibility not treat each case like a forensics investigation. Administrative law requires proof by a mere preponderance of the evidence – it’s a standard that should require an evaluator to take a reasonable look at a situation and not require proof “beyond a reasonable doubt” as to every dollar that was spent or received. Presently, Medicaid applicants find that every dollar spent that  they can’t explain is treated as a gift to someone else which was intended to speed up their Medicaid eligibility. The result that a transfer penalty is imposed. The application process is becoming increasingly difficult for individuals to navigate. Forewarned is forearmed!

Call us for legal advice and assistance with Medicaid applications, hearings and appeals, as well as asset protection plans …. 732-382-6070




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