Medicaid Benefits

Over half of all long-term care services are paid for by Medicaid, and two out of three nursing home residents are covered by the benefit. Specifically in Arkansas, Medicaid programs cover everything from home care to assisted living to nursing homes. But many families believe or have been told that they do not qualify because of the program’s income or asset rules, so they decide not to apply. This is unfortunate because there is a lot of bad information shared about Medicaid every day, even by well-meaning people in the industry. The key is learning how to qualify for assistance before you spend everything you have on the cost of care. The Elrod Firm can help.

The Medicaid Income Test

About half of all U.S. states still impose an income cap on long-term care Medicaid applicants, and Arkansas is one of them. Many people in need of long-term care who have higher than average income are told that they simply do not qualify for Medicaid strictly based on their income figures, so they give up.

But it is possible to get around the income limit for those who know what they are doing. Even those applicants who have income that exceeds the income cap can be eligible for Medicaid benefits if they establish, and more importantly properly use, an Irrevocable Income Trust, more commonly known as a Miller Trust.

If you’ve been told you don’t qualify for Medicaid because of your income, contact The Elrod Firm today to learn more about how the Miller Trust can help.

The Medicaid Asset Test

A quick Internet search might lead you to believe that no one can qualify for Medicaid if they have more than $2,000 to their name. That is a gross oversimplification of the Medicaid asset test. A single applicant can own a home and its contents, a vehicle, a prepaid funeral plan, and up to $2,000 in other assets, but a married applicant is allowed far more than that for the spouse living at home.

A special set of rules, known as the Spousal Impoverishment Rules, exist to ensure that the long-term care needs of one spouse don’t “impoverish” the other spouse still living at home; however, in order to maximize the amount of assets that can be protected under those rules, it is critical that you act quickly as soon as the need for long-term care is apparent.

If your spouse is facing imminent long-term care expenses, contact The Elrod Firm today to maximize the assets you can protect under the spousal protection rules.

One of our skilled attorneys can show you how the spousal protection rules are far more generous than most people think. Even single applicants can protect more in assets than one might expect. In most cases, asset protection for single Medicaid applicants hinges on having a proper understanding of the “five-year lookback” and the Medicaid transfer penalty.

The Medicaid Transfer Rules

One of the most common myths people believe when it comes to Medicaid transfer rules is that they will be denied Medicaid benefits for five years if they transfer any asset out of their name before they apply. While this isn’t true, the confusion is understandable because Medicaid does have a rule known as the “five-year lookback”; however, that rule does not mean what most people think it means.

At its core, the five-year lookback does nothing more than give the Department of Human Services the right to inquire about an applicant’s financial transactions over the past five years in an effort to identify gifts or transfers that may have occurred. For those with plenty of time to plan ahead for Medicaid benefits, this rule provides the timeline that must be followed for advance planning.

What most don’t understand, however, is that transferring assets during the five-year lookback will rarely result in five years without Medicaid benefits. Instead, when an applicant transfers assets during the lookback, the result is a transfer penalty or waiting period, the length of which is based directly on how much was transferred. It takes transfers in excess of $100,000 to impact benefits for one year.

In fact, when helping a single individual file for Medicaid, we often use the transfer penalty rules to protect a large portion of the assets that might otherwise have caused a Medicaid denial. It can be complicated and it can take some time depending on the number of assets we’re trying to protect, but these plans are far better than spending down until you’re broke, which is the path most people take without proper guidance.

If you’re helping a single family member pursue Medicaid, contact us today to find out how intelligent use of the transfer penalty rules can help protect the majority of the assets your loved one has worked so hard to save.

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