Medicaid Applications: Finish the Spend-down first

When a Medicaid application is denied due to “excess resources,” many procedural tangles can ensue. Individuals who require long-term care in nursing homes, assisted living or at home may apply for Medicaid when their countable available resources have been reduced to a low level, typically $2,000 for an unmarried person plus a protected share for their spouse. (Income is treated separately, but this post is about resources.) A “resource”  is “real or personal property that is owned by the applicant or by those persons whose resources are deemed to him or her [such as a spouse]… and which could be converted to cash to be used for his or her support and maintenance.” N.J.A.C. 10:71-4.1(a). There are a handful of exclusions, but overall, everything owned by the applicant is considered — IRAs, CDs, savings & checking, stocks and bonds, vacation property, time shares, life insurance policies, boats and trailers and cars… including most assets that are jointly owned or are marked “pay on death to …”.

The Medicaid application should be filed AFTER the assets reach the necessary level. Why? You file the application at the county board of social services and it then is added to a pile of applications a caseworker is already working on. Eventually the caseworker looks at it and notices that the assets are still in excess of the required level. You may get a notice many, many months after the date you sought eligibility for. At that point the case is “Denied” and you’d have to file an appeal called a Fair Hearing. We had a case where the “excess resource notice” was sent to the client’s wife one year later!! Meanwhile, a nursing home bill is accumulating. If the assets weren’t below the required level the day before a month began, there can be no eligibility for that entire month. So there might not even be any grounds for appeal, depending on the facts.

Many people have told us they were given the impression by a nursing home or other source that they should file the application several months in advance of actually being financially eligible. This erroneous information can lead to disastrous consequences, especially if the person handling the funds doesn’t continue to “spend down” after the application is filed because they are “waiting for advice from the county board.”

Call early for legal advice on the Medicaid spend-down process and the intricacies of Medicaid laws … 732-382-6070

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