5 Common Misconceptions About Medicaid
I have a confession. I’ve been avoiding writing about Medicaid. It’s just so complicated it scares even me the expert. But Medicaid can be really important to daughterhood. Someday you might have to decide if it’s right for your parent. So, you have to get smart about it.
Why Medicaid is important? It’s important because it’s the safety net when everything falls apart.
When your frail mother has been caring for your Dad at home alone for five years and she can’t do it any longer. When 24 hour a day home care is too expensive, and still not enough to keep your dad safe. And, then when his nursing home care quickly depletes their savings.
Maybe you’ve only heard about Medicaid as a program that provides health insurance under Obamacare. Well, for much longer than we’ve had Obamacare, Medicaid has been paying for nursing home care and, sometimes, home care for people who are very frail or disabled and whose income and assets have either been depleted by the costs of care or who never had much money to begin with.
The challenge here is navigating this very complicated program to get the help you need. Among the many complexities you’ll face as a daughter, few are more daunting and flat out scary than pursuing Medicaid eligibility….
But, as I’ve said before, I believe that you always just gotta start — you just have to get in the boat and start rowing, and the very first thing you need to do is avoid the big misconceptions about Medicaid that trip up so many people.
Here they are:
Misconception #1: Medicaid is a lot like Medicare
Not true. MediCAID is nothing like MediCARE. And, it is not a substitute for Medicare. Medicare is the program that pays for health care — like doctors and hospitals — for everyone over age 65 and certain people with disabilities who are under age 65.
Read 4 Tips to Make You Smarter About Your Parents’ Medicare
But, Medicare does not pay for long-term care — meaning care your parent needs on a sustained and ongoing basis in a nursing home, an assisted living facility or even ongoing home care.
To get those services, you’ll either pay for them yourself or, if you are eligible for Medicaid, it will pay for some or all of them.
In fact, the good news is if you’re an older adult, and you become eligible for Medicaid, you keep Medicare. This means that you’ll receive coverage from BOTH programs.
That’s right. You can be covered by Medicare and Medicaid at the same time, for different things.
Misconception #2: Medicaid is available to everyone
Unlike Medicare, which nearly all of us will qualify for just by virtue of turning 65, Medicaid is VERY protective of who gets benefits. It’s a safety net program that is designed to swoop in when things are pretty tough.
So, it requires applicants to go through a challenging, complex, and often lengthy eligibility determination process.
In order to get your parent’s long-term care paid for by Medicaid, they have to meet these basic requirements.
They Have to Have a HIGH Need for Care. Medicaid rules require you to need a lot of help doing one, two or more of the most basic activities of daily life; like bathing, eating. Or they have a severe cognitive issue like dementia. So, your parent will have to go through a process in which Medicaid assesses their level of need.
Your Parents’ Income Has to be Too LOW to Pay for Care. Medicaid is saving its money for people who most need the program. So, you either have a low-income to start with OR, so much income already going to medical care or long-term care, that you don’t have enough to cover the full costs of your care.
They Have to Have LOW Savings. Medicaid requires that you to have very little savings in the bank – about $2000.
When it comes to income and assets, there are a lot of rules for lots of different circumstances.
For example, your parent can’t have just given you all their savings in order to qualify for Medicaid – at least not recently. Medicaid will actually go look at all your parent’s bank statements over the last five years and examine every little transfer they made.
Also, if the Medicaid applicant is married, their spouse does not have to entirely deplete his or her income and savings. The idea is that the non-frail spouse should not become destitute as a result of this process.
Misconception #3: Medicaid Will Take Your Parents’ Home
It IS true that Medicaid is not set up to spend millions of taxpayer dollars on someone’s care just to have that person’s family inherit a mansion when the person dies.
On the other hand, Medicaid rules do try to preserve the family home for your frail dad while he’s living. But states may put a lien on the house while he’s alive, and then try to use the asset to recoup for care costs after he dies. This can sometimes create a pretty tragic set of circumstances.
This is complicated and it’s also scary. It feels like very big stakes — especially when it comes to your parents’ lifetime savings and/or their home. It can be a shock to realize that your parents’ financial security and yours could be very connected.
This is where many experts and books will tell you to get a lawyer to advise you as you are going through this process. And, I tend to agree. You can start by checking out the website of the National Academy of Elder Law Attorneys (NAELA).
The problem though is that not everyone can afford a lawyer. If that’s the case, I recommend starting by consulting the free state health insurance assistance office in your parent’s state. These trained volunteers can either help you directly or help you drill down to other resources.
Misconception #4: Medicaid is a national program that’s the same for everyone
Part of what makes Medicaid really complicated is that it is NOT a national program with the same rules and requirements for every American. Unlike Medicare, which is a federally run program that applies the same rules and benefits to everyone, Medicaid is actually run by states, although the federal government does share the costs. The feds set a lot of rules FOR STATES and then states get to make many rules for themselves.
The reason any of this matters for you is that, if you are caregiving for a parent in a different state, you’ll need to understand the rules in his or her state. And, if you are considering moving your parent, you’ll – very unfortunately – have to compare the rules across the states.
Misconception #5: Medicaid only covers nursing homes
Medicaid has traditionally paid mostly for nursing home care. But, no one really wants to be in a nursing home.
So, some states operate home and community-based services (HCBS) programs. This is a very big topic for which I will write an entirely separate blog very soon.
But, in the meantime, to find one, I recommend that you start by asking about “HCBS programs” through the local area agency on aging (AAA). And you can find the AAA through this federal locator – click here.
But beware! Unlike nursing home care, state Medicaid programs do not HAVE to offer HCBS so the availability programs will vary depending on where you live — see misconception number 3.
What’s Most Important
When is Medicaid right for your parent? It depends on so many individual and family circumstances. And, it depends on your state. There are no hard and fast rules.
But, if you’ve been walking down this caregiving road for a long time and you are looking at nursing home care, Medicaid may be necessary to pay for that care. OR, if your parent’s money is running out because of expensive care — even if he or she isn’t in a nursing home — then it could be helpful, especially if there’s a good home and community-based services and supports Medicaid program in your parent’s local area.
As caregivers I know you’re already really tired and stressed. And, figuring this program out for your family is not easy. But you’ve GOT THIS.
Just remember that it’s a crazy complicated hard situation. And it’s that way for everyone, even experts! It’s not that you are failing. You are good and normal and doing everything you can. That’s all you can do.
I oversee both my brother (medicaid) and my father (medicare + supplemental insurance ) – it is a crazy and time consuming task. Often I find myself just holding my breath and praying that I have chosen correctly so that they both receive the best care possible. In the state of Ohio, there are several supplemental programs for those that qualify for medicaid. My advice – read everything. then re-read again and again. Ask questions and document.
Thank you for posting this. I am in the beginning process of medicaid for my mom. She has dementia and is 92. Living in an independent situation. I’m tired!
Kris,
My mother also has dementia and cannot live alone anymore. We moved her from independent living to assisted living that claimed they could take care of her with her dementia. I explained everything we wanted for her. After two weeks her monthly payment went up two levels and they felt they could not meet her needs. We had to move her again which we all know isn’t the best thing to do for the elderly especially with dementia. But, we did find a memory care facility that is wonderful with employees trained in dementia. This is all they work with. My mother will pay for six months which will use up all her money and then get social security and Medicaid will kick in. I would suggest you look at memory care and see an elder attorney as they can apply for Medicaid for your parent. I know it’s extra money but worth it to be safe. You can also negotiate length of time to privately pay with facility also. Make sure you ask them if she can stay until she passes as you do not want to move her again. It is exhausting and they don’t make it any easier for you.with all the rules. Good luck!
One does not necessarily need to use a lawyer to apply for Medicaid. I did the application for a client of mine, I’m a Daily Money Manager (please see AADMM.com for info on that) in NJ and had a client who honestly spent down her money at an Assisted Living facility. She had perfect financial records for 60 months, which is what they are looking for. Any income or expense over $2000 must be explained and accounted for. The timing was a little dicey b/c I had to make sure she could cover her expenses in the last month before she qualified and I had to make sure she was not $.01 over-resourced, which is $2,000 in NJ. Good luck all!
Many people don’t know about Daily Money Managers but they can be a great resource and help in many aspects of caregiving.
Thank you for this blog. Because the facts about this subject are so complex, it seems important to listen and read about it on an ongoing basis.
I am 23 and live with my mother due to being laid off of job.
My Mother works. Am I entitled to Medicaid.
If i have my 401k in savings its 15000 and still have my wife on medicade in iowa shes is no in nurse home
It depends on many variables, including what county and state you live in, how many people live in the home, how much the outgoing living expenses are and how much money all of the people in the household being in. Most states will tell you the maximum amount of income for a certain household size if you call and then if the entire households income is below the maximum for that number of household members then you can apply and see if your assets and monthly bills meet the criteria for coverage.
Thank you so much for this blog…
My God Mother lost her husband in 9 years ago. They never had children, and now she had to be placed in a memory care skilled facility. Her next of kin all lives in another state, so her niece, and I trying to share guardianship. I’ve never been so tired in my life. To me it’s a shame that working people worked so hard to have a good savings, home, pension,etc.., to get it all taken away just to get medicaid. Working people paid into medicare for YEARS, seems like MEDICARE need to change its policy to HEALTHCARE, AND LONG TERM. We paid LONG TERM everytime we get paid. Not fair, not right. Hell, what’s the point of working. You get old, you get screwed, if you need long term care…
Hi Buffy – Well said! Believe it or not, there are a whole lot of people here in DC who believe Medicare should NOT pay for long-term care; that it is too expensive. Reading your words here reminds me how important it is for me to remind these folks how people feel about this and the real life effects. Thank you so much for sharing this.
How does SSI affect countable household members? My wife gets SSI. So now my household is considered to be ONE person (yes, we are still together and living in the same house)—-one person because the county office considers my wife to be “INVISIBLE”. They count our household as “one person” thus lowering the qualifying income level. So on the basis of a “one person” household I no longer qualify for medicaid. NY STATE
The SS office says I should be a two person household but the county makes its own rule about SSI.
Putting this out there for comment from the community. Unfortunately, that’s a level of program detail that we don’t know, especially as it relates to NY state Medicaid eligibility
I have Medicare but was advised to apply for Medicaid to see if it could help me medically. I have diabetes , pulmonary hypertension, heart disease, and 3rd stage kidney disorder.
My husband is unemployed due to health reasons,I have an income of$2,178 monthly can we qualify for medicaid we are only two in the household.
Hi Melendre, I’m so sorry to hear about your situation. The problem is it’s really hard to say if you’re qualified for medicaid because there are a lot of things that go into Medicaid determination. You need to check with the state office on Medicaid – can’t hurt to get the process started now.
Hi! Great resource on daughterhood for this information. My mother is 82 and has multiple health issues and mild dementia. She was in rehab facilities during covid. We were not able to see her. She had sepsis twice due to lack of care. That’s another story for another day
We are going through the Medicare application process and received a letter from the agency saying my mother closed a bank account in 2016 with $7000+ and closed another one in 2017 with $6000+. My brother and I have no idea where that money went. My mother in those 2 years sent my brother $600 a month to pay his car due to his health reasons.
2 questions. 1) Do we have to pay the amount back she paid my brother? 2) I am trying to figure out are they saying that she closed the account w $7000 and $6000 in them or that’s the amount that added up to what she sent my brother?
Thanks so much
Hi Maria, The answer is basically the state agency (except in CA) will require that any “gifts or transfers of assets” that happen within the five year window (it’s 30 months in CA) must be spent on care BEFORE Medicaid will pay. So any money your mother paid your brother, within that time frame, must be paid towards care. You should contact the agency for more information, make sure you have financial power of attorney so you can inspect all of her bank accounts to see how funds are transferred and where they went. This is a challenging process so hang in there.
My parents both were recently on medicaid when my father passed away in spring. I was told that I had until the end of the year to spend down his life insurance. After funeral expenses there is still some money left. Am I allowed to give that money to the church or other charity?
I really have no idea about this. Like no idea. I would suggest asking someone in your state Medicaid office who works on eligibility issues or consult a lawyer.
Contact your local “Senior Planning” company or an attorney that specializes in elder law. I just started this process with my parents who live in Connecticut. my mother is currently in a nursing home bcz of a fall and broken back, and my dad is home alone. They are 67 and 68 respectively…..They take in roughly the same amount you posted from their Social security. My Mom does qualify because of her long term needs of medical treatment, and because my parents have a savings of less than 100K. So far it’s been my experience that it’s a combination of factors in order to be qualified We are paying a senior planning service (6k), and an elder lawyer (2.5k) to help us thru the process swiftly and to ensure the few things they have (like the house) is safe for my Dad and won’t get a lien by medicaid. Good luck!!
I am turning 65 got into a bad accident injuries for life . My daughter stays home to help me she was planning on having a baby before my accident so now she had her baby trying to find work from home I get $771 a month we barely make ends meet. My daughter was left money from her grandfather that is almost gone . I will be getting a settlement for $58.000 now that I can not touch being on SSI it will go into a pool but what about my daughter who’s gone through all her money her grandfather left her that money she had to go through it to take care of me when I was supposed to take care of the baby. Not fare I didn’t ask to be dragged by a car. We had a plan
I should think that should qualify as a loan that your father has to repay. Hope you kept good records of bank statements to prove that you provided support.
Thank you for creating this Avenue. Finally, a place to read, become educated in the Medicaid Process and not feel so isolated in getting mom settled into her LTC Facility.
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On hbcs my wife is my caretaker she works for public partnership does her income hurt my chance of losing my helpmam
Some of a spouse’s income is protected – that is, not counted towards eligibility – but there are limits. Check with your state eligibility office to be sure.
How does Medicaid estimate the penalties of individuals who may give cash gifts that fall within the five year “look back” period?
Hi Stacey, this is a level of detail that requires a lawyer’s advice
Im getting around 15,000 from ssi and ssdi back pay. 2020. Woll i lose my medicaid health insurance? Im buying a car with ALL the 15,000.
Im very confused. My case eorket dorsnt call me back.
BTW im getting chemo. Rectal AND prostate cancer from fall of 2019.
The only asset i will have is a car and less than 2000 in bank.
I think we say that she needs to get verification from the state eligibility office on the use of the back pay. But our understanding is that she/he is eligible for Medicaid as long as she/he is enrolled in SSI and has less than $2000 in savings. The car should not count towards assets. But this is a little bit beyond my expertise.
hi, we have GC since last 5 yrs, We have no income.We lives with our Daughter,On TaxReturn we are dependents on our Son. Can we get Medicaid ?Thanks
living in Oregon – Mother in-law receives medicaid, disabled, lives in an assisted living facility and currently under the income restrictions. Her husband passed away and she “could” now receive $1500 more a month from a pension, which puts her over the income restrictions for Medicaid, (but still disabled) but won’t make enough to cover living and medical expenses. Any idea if she could still qualify and give all of her income except the $170 or will she be denied and have to private pay? I had thought about calling the state medicaid office to get some insight/help, but don’t want to provide names or raise any red flags.. trying this avenue, as it’s stressing me out.. thank you
This falls into the “legal advice” realm where you’ll really need to talk to someone who is familiar with Oregon Medicaid policy. Try looking here…https://www.naela.org/
Did the clawback period recently get reduced from 5yrs to only 3yrs ? As it relates to Medicaid eligibility?? Thanks
We’re not aware of the asset transfer timeframe being reduced from 5 to 3 years but we believe it may be different in CA (e.g., 30 months). These issues are quite state sensitive so it’s a good idea to check on your state Medicaid eligibility website for the exact rules where you live.
My brother was diagnosed with a mental disability about 10 years ago. He was on medicaid for a while. It was stopped because he’s able to work part time and he lives with my parents, who have a comfortable lifestyle. If something happened to them, there’s no way he could support himself. Does he have to wait until something happens to them to get on medicaid again? I just hate the thought of others abusing medicaid when he truly needs it to live independently. Is there a political party that is stricter on medicaid eligibility than the other?
Your brother will be automatically eligible for Medicaid if he qualifies for Supplemental Security Income (SSI). SSI is an income support program for people with very low incomes and few assets. The nice thing about SSI is that it qualifies someone automatically for Medicaid. The bad thing is that you can’t earn very much money or you don’t qualify. It can be hard for someone to live on an SSI check but often people with mental disabilities will live in “group homes” that get paid through a combination of the SSI check and Medicaid. These group homes can have waiting lists so it might be good to sit down with a Medicaid eligibility specialist or a community-based organization that represents people with mental disabilities to see what they suggest. Bottom line is that there’s no clear answer because much depends on where you live. Some states are more generous than others. In my experience, few people abuse Medicaid.
Is someone not eligible for Medicaid if they receive Social Security? Is Social Security exempt from the Medicaid “spend down?”
Social security is not entirely exempt. Individuals in the process of “spend down” will be allowed a “personal needs allowance” that they may keep to pay living expenses. The personal needs allowance varies depending on whether a person is living in a nursing home or in the community. It’s lower in the nursing home because Medicaid covers room and board, whereas it’s higher in the community to allow for the individual to pay for room and board living expenses.
I love when people complain about these programs. We are lucky to have them. If we didnt alot more people would die because bad things happen in life. If you don’t like medicaid start your own program. If you don’t like that the cancer drug somebody else invented is expensive invent your own drug. I know I’m being overly harsh it it’s for effect because people need to seriously reevaluate how we are dealing with life and who we are blaming for things and the personal responsibility that seemingly doesn’t exist anymore.
Your lack of empathy says it all. These comments are mostly from people dealing with disabled parents and children. They have endured considerable hardships. God forbid you ever need to care for a parent or a sibling because your response says it all. You are incapable.
I had my 95 year old mother living in an apartment across from me. I went to her appt one morning and found her on the floor unable to get up with a black eye. I have a power of attorney and i had to call an ambulance to get her up and take to the hospital. Due to Covid this year I was not able to get my mom out and about so her muscles in her legs got so weak she was wobbling all over the place. Needless to say the hospital agreed that she needed therapy. She also has memory issues so I really had not choice but to place her in a nursing home permantlly. She only receives SSA and a few investment funds that still come out to less that $2000.00 plus her insurance supplement takes $300.00 of that. She does have about $6000.00 that I have taken out of the bank which is just odd savings. Is there someplace I can put it to keep medicaid from claiming it and not qualifying her. She has no other income besides her burial insurance.
Hi Rebecca, By law, asset transfers have to take place fairly far in advance of Medicaid eligibility to be excluded from the “spend-down” requirements. you probably don’t want to pay a lawyer to advise you about $6,000 but every state has different rules about financial eligibility and there may be some opportunity to put the money in trust for her to use for incidental living expenses. If you transfer the money to your bank account, most likely the state will try and recoup it. But again, please do consult a family lawyer for a more precise answer.”
My mom has been in skilled care nursing homes since Aug. before she became ill, she was living with my brother who is disabled and on Social security. My brother is dependent on my mom financially, and they both live off of social security and my moms Retirement funds. They live in an apartment, do not own a house so pay rent monthly. I have POA for mom and am worried that all of her money will be spent down before she can be eligible for Medicaid. But then she won’t have any $$ to pay rent if she is able to return home, . And my brother will not be able to afford living there. Is there anything I can do with her $$ that Medicaid can’t touch so they don’t lose their apartment? Can I set up a trust? Can I help my brother apply for Medicaid and housing assistance? Any advice would be greatly appreciated!
Hi Julie, Unfortunately our system has big gaps in it like the one you’re experiencing. It’s really important that you consult a family law attorney with experience in Medicaid as soon as possible. Every state has different laws about the protection of assets so you need someone to advise you who has experience in your state’s rules.
Hello ..Have you heard of QMB program? I’m 33year old on disability in need of liver transplant and Im worried that assets and liquid resources would kick me and my son off of Medicaid.
Can you help?
I give my parents an allowance every 2 weeks, my father is sick and getting a divorced. My mother is helping him with the Medicaid Process; but I wonder should I stop giving him his allowance? It’ s not much, $100, $2,600 at year. Is it okay if it’s just directly into his checking? We don’t know if he will need to go into housing in the future (we hope not); I hear that if that’s the case they will look back into his checking account for the last 5 years. They live in a expensive city (NYC) so it’s not like that’s a lot of money.
I’m 95% sure your contributions do not count as income for the purposes of calculating eligibility but you should just check in with the state Medicaid office to be sure.
Hello,
We live in PA. My mom is on disability and is taking care of my grandmother with late stages of Alzheimer’s. She is currently under Hospice care. She is trying to get her on Medicaid but they want the 5 year financials. My mom lives with her in the house my grandmother owns. We are worried some of the expenses over the last 5 years will be tough to explain. For example new windows, carpet and other house maintenance that was neglected for many years until my mom moved in about 4 or 5 years ago. She is POA. Any help would be appreciated.
Hi Desiree – Thanks for reaching out. In general, home repairs are exempt from the “look back” rules that prevent potential Medicaid beneficiaries from transferring income and assets. The primary home is an “exempt” asset for the purposes of determining eligibility and so any repairs to it should not count against eligibility. This article does a pretty good job of explaining it. https://www.nolo.com/legal-encyclopedia/safe-ways-spend-down-your-assets-qualify-medicaid.html
My father just passed away 2 months ago…his wife has dementia. Immediately after he died , her daughter placed her in a memory care facility, and is using Medicaid to pay for her time there. They’re assets were well over 1 million, and because my dad died first all his assets went to his wife with dementia. Her daughter is executor of her moms estate, and has not been forthcoming about how she was able to get her mom Medicaid and claims all assets real estate possessions and other liquid assets went to her mom, but we’ve seen no will, it’s not in probate( although we know there was a will) and she is getting Medicaid?? Unfortunately, my step mom is now in hospice – I feel the state has been duped and a scam is happening
What should I do? Seriously thinking it was elder abuse and undue influence- my dad was very sick for the last couple years
You should contact the local area agency on aging (there’s a directory at the “N4A” website https://www.n4a.org
) and ask to speak to a long-term care ombudsman…
My 90 year old mother lives with me and contributes $400 month for her room and board. If/when she applies for Medicaid will we have to pay that money back?
You “might” if you don’t have a rental agreement in place. That is, it’s important to formalize the relationship with an actual contract in order for the payments to be excluded from Medicaid eligibility. You need to talk to a lawyer as soon as possible.
My mother is currently on Medicare and Medicaid and she is up to renew her Medicaid benefits. Medicaid is requesting income received from everyone living in the household for the last 30 days. I live with my mother and get paid by Medicaid to take care of her. Will my part-time income need to be included to renew her benefits or am I considered a separate household since I file an individual income tax and do not claim her as a dependent?
Medicaid eligibility does not take into account the income of adult children – only the individual and his or her spouse. However, the wording of this request is confusing. I don’t know how the state is defining “household.” I think your interpretation is correct but I cannot say for sure and suggest you get in touch with the agency to clarify and make sure you send the right information. I do want to reassure you that your income should NOT prevent your mother from renewing the benefits.
when people complain about these programs.If we didn’t a lot more people would die because bad things happen in life. you don’t like Medicaid start your own program. If you don’t like that the cancer drug somebody else invented is expensive invent your own drug. I know I’m being overly harsh it’s for effect because people need to seriously reevaluate how we are dealing with life
Both parents were recently approved for Medicaid with intent to return home. Due to health they cannot return home. The house has a mortgage and we need to sell it. Will selling the house create any issues with Medicaid?
My Mother recently passed away, with Dementia and other complications. She was in a Nursing Home for years, and had previously qualified for Medicaid and went through all the scrutiny of depleting her worth.. Prior to that my Step-Father removed her name from her home, her bank accounts, cashed in her life insurance, took EVERYTHING from her name. When he passed, my step-brother was named executor of their estate. (my step-dad passed 3 years ago) Anyway, My mom used to get over $2500 monthly on SSI and then got additional Vet benefits when my step-dad passed, as well as stock dividends quarterly. I have asked my step-brother to supply us with monthly bank statements of my Mother’s account knowing that she had to keep her balance under $2000, where did that money go you might ask? So are we.. He says that Medicaid has all of that and they have all her monthly statements.. she was in the nursing home for almost 7 years, and has long since qualified for benefits. Would they still require and have these bank statements up to her death in December 2021? If so, how would I go about getting them?