Justin, I need help. I placed my father in a nursing home about six months ago. The first month was covered by Medicare. After that, the staff at the nursing home said that my dad appeared to be qualified for Medicaid. Under Medicaid rules, they only billed him $1,500 each month, which is just a little less than his monthly income. Just this week, six months after he first moved in, I received a bill for $22,500 in the mail! Apparently my father was denied Medicaid because of a small life insurance policy we forgot about that has a cash value of $2,500. Can’t I just give them that $2,500 instead of paying the full $22,500? – Rob
Rob, I’ve got bad news for you. From the facts you outlined, it looks like your father really does owe the nursing home $22,500. I believe that amount is equal to the difference between the facility’s private pay rate of $6,000 per month and the $1,500 per month they charged him for the five months his Medicaid application was pending.
Unfortunately, it does seem like your father’s Medicaid application was properly denied because the Medicaid asset limit is $2,000. The cash value in his life insurance policy counts against him as an asset, so he failed the asset test even if he had very little money in the bank. Because your father was never qualified for Medicaid, he owes the private pay rate for every month he lived at the facility after Medicare coverage ended, not just the $2,500 that put him over the limit.
Medicaid applications are taking longer and longer to work their way through the system, and unexpected denials are extremely costly. That is why many families choose to work with my firm when filing for Medicaid, even when the applicant appears to qualify without significant legal work.