Let’s assume that a family member of yours is in a nursing home for long-term care. The monthly bill is $9,000 per month, and your family member is worried about losing her home and savings. You searched online for “elder law attorney” because you are wondering if you should have an elder lawyer help you file the Medicaid application.
Do I Need An Attorney to File A Medicaid Application?
Some people that want to apply for Medicaid might not need an attorney’s help, though it is always recommended. This type of Medicaid applicant has no house, no car, and a total of under $2,000 in assets. The applicant also must have under $2,349 (2020) in gross monthly income (or establish a Qualified Income Trust). The applicant must be certain that they have not made any gifts or transfers of property to anyone or to a Medicaid trust within the last 60 months.
For people that have more than $2,000 in countable assets, but still have a fairly simple financial situation, they should consider engaging an attorney to help guide them on the appropriate Medicaid spenddown. For example, it is often possible to use the excess assets to pay attorney fees, purchase an irrevocable pre-paid funeral plan, pay off debt, and purchase medical supplies or personal items to reduce countable assets to a qualifying level.
More Complex Situations
A person that has more than a few thousand dollars in various bank accounts, a home, vehicles, retirement plans, life insurance or annuities has a great deal to lose. This is especially so if there is a healthy spouse.
In these cases, there are many Medicaid planning concepts to be considered before an application should be filed. The elder law attorney will help you consider the following as part of the Medicaid application process.
Why Use an Attorney to File A Medicaid Application?
First: Many families are surprised to discover that a Medicaid application cannot be filed before establishing a guardianship in the probate court. For example, if the husband is mentally incompetent and his car needs to be sold in order to spenddown, this cannot be done unless he signed a durable financial power of attorney before he lost mental capacity. If he did not make a power of attorney, a guardianship will be required to give his wife the power to sell his car.
If the husband is still competent, the elder lawyer can help him create the power of attorney to avoid guardianship in the probate court, which would save thousands of dollars and a great deal of headache.
Second: An elder law attorney can often help families protect some of the money before the Medicaid application is submitted by making sure the spenddown is done correctly. Do not spend down all of the money before reaching out for help. You should meet with a Medicaid lawyer immediately upon diagnosis of Alzheimer’s, dementia, or whenever you believe you will need in-home, assisted living, or nursing home care in the future.
Third: Most people don’t realize that Ohio has “Medicaid estate recovery.” This means that after a Medicaid recipient dies, the State of Ohio is entitled to be paid back for the amount of Medicaid benefits received from the house and other assets that the recipient owned when they died. This recovery could be hundreds of thousands of dollars. An elder lawyer can help your family avoid estate recovery and make sure the government does not take the house.
Fourth: One of the most time consuming and frustrating parts of the Medicaid application process is identifying all the assets and getting documentation to prove the value of the assets. For example, you will need to provide all bank and financial statements for every account an applicant owns for up to 60 months. This means that a person who has 5 different accounts may need to provide up to 300 different bank statements to apply for Medicaid. If the applicant is married and the spouse has 5 separate accounts, up to 600 statements might be required to apply!
Medicaid applications are denied if all financial records are not provided by the caseworker’s deadline. This can be very costly, because if an application is denied 2 months after the application was filed, a new application will need to be filed. This means that 2 months of eligibility was lost. If the nursing home cost is $9,000 per month, that is a loss of $18,000 because of the Medicaid denial. A Medicaid lawyer can help you avoid unnecessary denials.
Fifth: If the Medicaid applicant has gross monthly income of over $2,349 (2020), their application will be denied unless they create a QIT Qualifying Income Trust. An elder law attorney can create this QIT for you as part of the Medicaid application process.
Sixth: A delay of one month’s Medicaid eligibility can cost you $9,000. If a Medicaid application lawyer can help you complete the process more quickly than you would be able to on your own, the savings can be $9,000 or even more.
Seventh: The Medicaid application attorney will deal with the Ohio Department of Jobs and Family Resources (ODJFS). An elder law attorney will make sure you do not have to deal with the caseworker, and will be better able to catch any mistakes that are not to the client’s benefit.