Latest Medicaid Information

Medicaid is a federal and state government program that finances long-term health care for the elderly and disabled populations.

Medicaid covers a wide variety of medical benefits. These include prescription drugs, medical equipment, high-risk care, and home health care aides. Medicaid also covers nursing home and hospital care for eligible applicants. Applicants are deemed eligible upon meeting both the financial and medical requirements set by the government.

Medicaid is entitled to be privy to all financial records from the last five years.

Applicants may be eligible for Medicaid immediately, or may be subjected to a waiting period before qualifying for benefits. Waiting time may be between one month and five years, depending on the composition of the family unit, and the amount of assets transferred. In order to make this assessment, Medicaid studies all of the individual’s transactions and assets of the past five years, known as the “look-back period.”

Individuals over the acceptable resource levels may transfer their assets in order to qualify for benefits.

There are different rules for transferring assets, based on family composition and type of care needed. There are also more lenient rules when applying for home care benefits as opposed to nursing home benefits. Each type of asset transfer will incur different ramifications in terms of eligibility and wait time.

The Deficit Reduction Act of 2005

Signed into law on February 8, 2006, the Deficit Reduction Act imposed many new changes and restrictions on Medicaid applicants. Designed to prevent Medicaid fraud, the new law can severely limit the benefits available to those unaware of its ramifications.

The Deficit Reduction Act implemented four major changes in the law:

1. The look-back period has been increased to five years. As such, families must begin Medicaid planning much earlier than in the past.
   
2. The penalty wait period for transfers of assets will not begin until the applicant is both admitted to a nursing home, and below the allowed asset range. This postponement creates great difficulties for patients in immediate need of benefits.
   
3. The Valuable House rule, denying eligibility to seniors possessing equity in homes exceeding $750,000, makes it more important than ever to engage in appropriate planning in order to protect the family home.
   
4. The purchase of annuities, applying to all transactions after February 8, 2006, will now be treated as a gift, and subjected to a penalty period barring specific circumstances.

With so many complicated and intricate laws involved, it is imperative that applicants consult a qualified expert before applying for Medicaid benefits.

Information contained on these pages is for educational and informational purposes only. Always consult a professional to receive the most comprehensive guidance before engaging in elder care planning.