Don’t believe everything you hear about Medicaid.
I have had several calls and questions about Medicaid that make it clear that there is a lot of misinformation about Medicaid. Here are some of the questions I fielded this past month:
- “Is it true that if I am applying for Medicaid and sell my home, I have to use the proceeds of the sale to pay for my long-term care?” First, youdo nothave to sell your home. Your home does not count toward Medicaid eligibility. If you are a couple, after one spouse qualifies for Medicaid the home can be transferred to the non-Medicaid spouse, who can continue living in the home. If you are single, Medicaid allows you to sign a form that you intend to return home, if possible. This allows you to retain ownership and control of your home. However, Estate Recovery will make a claim against your estate for the costs of your care after you have passed away.
If you decide to sell you your home, Medicaid requires you to spend down your cash assets to $2,000 for a single person or $3,000 for a couple if both are on Medicaid. But the proceeds of the sale can be spent to benefit you personally. For example, you can pay off debts, buy a new car, pay for eye care, prepay funeral expenses, pay for travel, pay for dental and medical expenses not covered by Medicare or Medicaid, or for any other expenditures that benefit you. The proceeds of the sale of your house do not have to be used to pay for your care. One final point, you cannot give your money away. There is a 5-year lookback for any money that is given as a gift.
- “Is it true that if I set up a Miller Trust, that I can use the money in the trust to pay medical bills or upgrade my room to a private room?” Youcannotuse the money in a Miller Trust to pay medical bills or upgrade a room. A Miller Trust helps you qualify for Medicaid when your monthly income exceeds the maximum limit allowed by Medicaid, which is $2270 per month in 2018. If your income exceeds that amount, you can use a Miller Trust, to qualify for Medicaid, but the money that goes into the Miller Trust is used to pay for your share of costs at the facility. Any money left in the trust at your death goes back to Medicaid.
Another trust, known as a Special Needs Trust, is a trust set up to supplement the needs of a person who is disabled and receiving Medicaid. If a person has a Special Needs Trust, it can be used to pay medical bills or upgrade a room. Apparently, the person who asked the question was confusing a Miller Trust and Special Needs Trust. These are different trusts that are used in different situations.
- One last myth to dispel—If you are married, and only one spouse is going on Medicaid, the well spouse can keep half of the cash assets up to $123,600, and the other spouse can still qualify for Medicaid.
These Medicaid Myths that are passed around can cause you to spend down more cash than you need to. It is important to have accurate information when making decisions about Medicaid. The costs of long-term care represent a significant financial risk. Understanding how Medicaid works will allow you to access government benefits in the least, financially-disruptive manner possible.
Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.