Frequently Asked Questions

Basically, a person is permitted to own some property, and still be eligible for Medicaid. The trick comes in knowing what is “countable: and what is “non-countable” under the Medicaid rules. For a married couple “non-countable” includes, for example, the marital home that is occupied by the healthy spouse. Whether you are married or not, certain types of prepaid burial contracts are non-countable. There are many other types of “non-countable property.” The bottom line is, you don’t need to be completely without assets to be Medicaid eligible.

The Medicaid rules provide that a person can be disqualified for giving away property, in some cases. Disqualification depends on what is given away, to whom, and when. Again, it’s complicated. Some asset transfers are not penalized under the Medicaid rules. Consult a lawyer who knows the law.

The disqualification isn’t always 5 years long and, under some circumstances, there is no disqualification at all. True, there is a 5 year “look back” for some asset transfers under the Medicaid rules. This means that the Medicaid agency will “look back” at all transfers of property, including sales for less than market value, made in the previous 5 years.

When a married person applies for Medicaid, assets in either or both spouse’s name are considered by the Medicaid agency. However, some assets won’t be “countable” and you may keep some as an asset allowance if your spouse enters a nursing home. See #1 above.

Assets are counted regardless of which spouse’s name is on the title. However, there are special rules which apply to protect a healthy spouse’s financial security.

Medicare only covers a small amount of the nursing home care provided in this country. Many older people are surprised to learn this. In general, there are 20 days of full coverage if you go into the nursing home after at least three days in the hospital, and are getting skilled care (not intermediate level care). Then, if you still need skilled care, you can get up to 80 days of partial coverage from Medicare. After that, you will either pay out-of-pocket, or get Medicaid, unless you have private long-term care insurance.

You are not required to spend your assets to pay for nursing home care. However, some nursing homes might try to make you believe that you do have to do this. They are paid less under the Medicaid program than they collect from private pay patients. Families should seek advice from an elder law attorney to find out how to become Medicaid eligible without having to spend a significant part of their assets on the private pay rate.

See #7 above. Nursing homes may tell you that you have to spend your savings on the private pay rate, before applying for Medicaid, but this is not true. The rules provide options for preserving family assets.

Your best tool to be able to plan for Medicaid eligibility, should you ever need it, is to sign a general, durable power of attorney that includes a “gifting” power. Your agent under the power of attorney will only be able to retitle your assets if your power of attorney contains a “power to make gifts”. Most powers of attorney don’t contain this, so you might want to ask your attorney to add it.

The court procedures to transfer assets without a “gifting power” can be expensive and time-consuming, and may not allow the type of asset protection that many people would like to accomplish.

Without a “gifting power” your agent is generally limited to spending your money on your bills and selling your assets to generate cash, to pay your bills. A “gifting power” is recommended for people who want to become eligible for Medicaid and not be limited to the “non-countable” assets allowed under that program.

Some powers of attorney contain this “gifting” provision, but it’s limited to $13,000 per year. This figure is too limited to do effective Medicaid planning, and is related to a completely different type of legal issue. (See #11 below, about the federal estate tax.)

One more word about the “gifting power”. You should require your agent under your power of attorney to consult with any attorney experienced in Medicaid law before making any asset transfers.

Not all transfers of property will cause a person to become ineligible for Medicaid. See #2.

This is not a requirement in Missouri or the majority of the states.

The law allows you to keep a portion of your spouse’s income if your income is below certain limits. In addition to this allowance, you may be entitled to a greater allowance if the cost of maintaining your home exceeds a certain amount of if a state hearing officer orders a greater allowance.

Intentional misrepresentation in a Medicaid application is a crime and can be costly. The IRS shares any information concerning income or assets you have with the Medicaid program. You or whoever applied may have to pay back Medicaid to avoid prosecution.

Medicaid rules change, so don’t rely on the law that applied to your neighbor. Also, there may have been facts about your neighbor’s situation that you just don’t know. It’s best to have your situation analyzed by a competent elder law attorney.