Medicaid planning can be a difficult and confusing process. The following are some common mistakes people make when planning to apply for Medicaid.

  • Thinking it’s too late to plan. It’s almost never too late to take planning steps, even after a senior has moved to a nursing home. The senior’s assets, or at least a portion of them, may still be able to be saved.
  • Thinking they are ineligible because of the level of their income. New York is a “spenddown state” meaning if you have more than the Medicaid monthly income allowance ($50 for nursing home benefits and $954 for community Medicaid for a single persons), you can still qualify to receive Medicaid benefits and, depending on your circumstances, you may even be able to keep all or a portion of the excess income.
  • Ignoring important safe harbors created by Congress. Certain transfers are allowable without jeopardizing Medicaid eligibility. These include: transfers to spouses, disabled children, caretaker children, certain siblings, into a trust for anyone who is disabled and under age 65; and a transfer to a ‘pay-back’ trust if under age 65.
  • Failing to take advantage of protections for the spouse of a nursing home resident. These protections include spousal refusal, the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance, and in some instances petitioning for an increased income allowance.
  • Applying for Medicaid too early. This can result in a longer ineligibility period in some instances.
  • Applying for Medicaid too late. This can mean the loss of many months of eligibility.
  • Not understanding how Medicaid affects your home. Nursing home residents do not automatically have to sell their homes in order to qualify for Medicaid, but that doesn’t mean the house is completely protected. The state will likely put a lien on the house while the resident is living and attempt to recover the property after the resident has passed away.
  • Not getting expert help. This is a complicated field that most people deal with only once in their lives. Tens of thousands of dollars are at stake. It’s penny wise and pound foolish not to consult with an attorney who knows how to guide clients through the process. To consult with a Kurre Schneps LLP attorney who is an expert in Medicaid planning and eligibility, click here.