Don’t count on the Medicaid representative at the County Board to remind you to Spend Down

An application for Medicaid benefits cannot be approved before the applicant (and spouse, if any) has completed the spend-down, because benefits are not payable unless the applicant is financially eligible. It is not uncommon for someone to initiate an application for Medicaid without having any idea whether they are eligible or not. The nursing home may start the process; a nonattorney representative may start the process; a hospital social worker may suggest that  they apply. They may leave the intake interview with a List of Required Documents, but not be told that they have to spend down to “X” level before the application can be processed. Sometimes, months go by and the hapless applicant is running up nursing home bills without actually being Medicaid eligible because they didn’t “spend down.”

Despite the fact that the regulations of the State Medicaid Manual  at N.J.A.C. 10:71-2.2(c) specifically obligate the County Welfare Board to assist the applicant in this process, all government agencies are reticent to provide advisory opinions on what measures will comply with a program’s rules. There may be substantial opportunities to shelter assets for the family, but the CWA cannot be counted on to provide that sort of advice. Also, given the huge volume of cases, there may be many procedural tangles that prevent the applicant from receiving necessary advice through the CWA. Unfortunately, if the applicant sits back and waits for guidance, they may discover that they and their spouse are incurring tremendous financial obligations that they have no good way to pay.

The spend-down may be a combination of expenditures, exempt transfers and replacement of existing assets. The math is precise and until the spend-down is completed, there can be no eligibility. By getting individual legal advice early in the process, an applicant can take advantage of the opportunities that the rules provide to protect his family and achieve eligibility at the soonest possible time.

Call for representation regarding Medicaid eligibility spend down planning …. 732-382-6070

Going from ACA Medicaid to “Regular” Medicaid Can Be a High Wire Act Without Legal Assistance

New Jersey has a lot of roads to eligibility for Medicaid, and that’s a good thing.  All of those roads are called NJ FamilyCare, and that’s a confusing thing.

Medicaid in New Jersey is provided by five Managed Care Organizations (MCO) now through NJ FamilyCare.  You must choose one to get services, including long-term services and supports (LTSS), which will be coordinated by the MCO care manager.

If you began to receive Medicaid/NJ FamilyCare benefits because you were income- eligible and without other creditable health coverage (in other words, you receive Medicaid through the Obamacare Medicaid expansion), you could lose your Medicaid coverage if you have a change in your modified adjusted gross income (MAGI) or you obtain other coverage (like Medicare). Unless you are eligible for Medicaid through another pathway (called Aged, Blind or Disabled, or ABD) you will lose services.

For example, if a person with limited income and no insurance had an unexpected illness and spent time in the hospital, it is likely that the hospital got the person on Medicaid through Obamacare, enrolled the person in an MCO, treated that person, and then discharged that person to a rehabilitation facility, where long-term care would also be covered.  However, if there is a later increase in income which would allow that person to purchase subsidized insurance, Medicaid will be discontinued and there will no longer be a payor for the nursing facility or other long-term care setting.  Hence, the need to scramble for ABD, which can co-exist with other insurance coverage.

Planning for ABD Medicaid could include:  spending down resources, establishing a Qualified Income Trust for income, establishing a Special Needs Trust for assets, or other planning that could involve a spouse or disabled or minor child.  In the case of a special needs trust, this type of planning must be done before your 65th birthday.

New Jersey’s Medicaid expansion benefit package does include, via federal waiver, MLTSS–so you must always think about how your eligibility category might change and how to maintain the benefits you currently have.  It can be a very difficult process, but we can help–call us at 732-382-6070.

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