"My friend said . . ."
All too often, we meet people who have been given wrong information about Medicaid from well-meaning friends, co-workers, family members, and even people who work in hospitals, nursing homes, or for the government. These stories are often filled with inaccuracies and half-truths that cause people to spend more than they should when they could in fact have qualified for Medicaid coverage for the cost of their long term care in a nursing home.
Similar stories have also prompted people to assume that what worked for a friend will work for them as well. So, they may put all their money into certain types of annuities or enter into certain funeral contracts in hopes that they will immediately qualify them for benefits. Unfortunately, they soon find out that these transfers mean they are unable to receive benefits for several months or even years because the Medicaid rules have changed and now prohibit them.
Medicaid is a government benefit program. If the senior who is now a nursing home resident paid federal income tax, Michigan income tax, and FICA payroll withholding taxes, that senior has supported the Medicaid program for others. It's a shame that if now, when the senior could use the assistance of the Medicaid program themselves, they do not utilize it due to bad information. That's why it is important to contact an elder law attorney who concentrates his or her practice in Michigan Medicaid Planning. With a clear picture of your specific situation, a Medicaid Planning attorney can explain those laws that should allow an individual or married couple to preserve their house and enough of their assets to live comfortably for the rest of their lives.
Have you heard this myths about Medicaid eligibility?
Myth: If you're already in a nursing home, there is nothing you can do to protect your assets.
Truth: There is no such rule. You may qualify now. The 36 month rule (which is now 60 months) is a disclosure requirement. You have to disclose up to 60 months of financial records and transactions, including any transfers, when applying for Medicaid, but you can still protect your assets, even if you're already in a nursing home.
Myth: You have to give away your assets to protect them.
Truth: You don't have to give up control of your assets to protect them and you shouldn't.
Myth: The law permits Medicaid to take your home.
Truth: Your home is not counted as part of the $2,000 countable asset limit so long as the equity in your home is below $500,000. However, Michigan's new estate recovery law will allow the state to seek reimbursement from your estate to recover Medicaid costs after your death. However, the law also allows you to structure the title to your home so that you still own it and estate recovery is avoided at your death.
Myth: My father is in a Michigan nursing home and my parents have $90,000 in the bank. My mother has to spend it down to $2,000 before my father qualifies for Medicaid. How will my mother be able to live on $2,000?
Truth: Under the Medicaid Catastrophic Coverage Act, all of your parent's bank account can be protected without spending down to $2,000.
Myth: My mother is a widow, is in a nursing home and has $8,000 in a savings account and $23,000 in an investment account. A person at the nursing home said my mother has to spend down to $2,000 before she qualifies for Medicaid.
Truth: Even though your mother has already moved to a nursing home, it is possible that she may be able to keep 50 to 70% of these assets and still qualify for Medicaid.
Myth: I met with a caseworker at the Department of Human Services and they said my mother would not qualify for Medicaid until she spent down to $2,000. The caseworker did not mention she could keep 50 to 70% of her assets.
Truth: The state will only tell you what you can't do, not what you can do. The Department of Human Services will authorize Medicaid to pay when you qualify, but it's not the state's job to do Medicaid planning for you to help you qualify. The state has an interest in paying as little as possible, so other then telling you to buy a prepaid funeral or that there is a Community Spouse Resource Allowance, the state will not assist you with Medicaid planning. In this day and age, we have to rely on ourselves and our family members to look out for our own interests, not the government.
Myth: I am married and my husband had a stroke and had to move to a nursing home. We own a home and have $120,000 in the bank. The lady at the nursing home said I can only keep $60,000 before my husband qualifies for Medicaid.
Truth: You can keep the full $120,000 under the Medicaid Catastrophic Coverage Act. We cannot rely on big institutions like hospitals and nursing homes to give us proper Medicaid planning advice. The staff are well meaning, but their job is to provide care, not to know all the legal intricacies of the Medicaid law. Also, the staff in these for-profit institutions are very busy. They would like to help you as much as possible, but they have to spend most of their time are their primary duty, providing care. In this day and age, it is our responsibility to seek out professionals to give us proper legal or financial advice and not rely on big institutions.
Andrew Byers is an Elder Law Attorney who assists seniors and their families in qualifying for Medicaid nursing home benefits in Oakland County, Macomb County, and Wayne County, Michigan.