February 26, 2013

Misconceptions of Medicaid – Your Advocacy Connection

By Kathy Nitz
GolderCare Solutions

I have been involved with benefits planning for seniors and disabled clients for the better part of the last 13 years, with Jamieson Long & Associates, and then with its sister company, GolderCare Solutions. I interact daily with government and other agencies on behalf of our clients. Another important aspect of my job is to talk to clients when they initially call in and to meet with them at their first consultation. Often times, we hear some of the same questions and concerns from our clients. Normally, it is a preconceived notion that has been perpetuated through social circles based very loosely on
certain facts. I thought I would discuss some of the comments we often hear relating to long term care and Medicaid.

First, the house. The house is always the first concern of our clients. We receive many calls about this issue. Often times, the children call, concerned that because Dad is now in nursing care, the “State” will take the house, and Mom will have to move out. If one spouse is in care, and the other spouse is still at home, the State won’t take the house. Period. Even if there is no spouse at home, the State won’t take the house. The State doesn’t want your house. We have tried to turn over houses to the State, and they won’t take them. However, what the State will likely do is attach a lien on the house, if careful planning is not done in advance. If a lien is attached to the house, which is titled in the name of an institutionalized person, when the house is sold, the lien must be paid off from the proceeds of the sale. But, if planning is done correctly, that may be avoided altogether.

Another issue that comes up all the time is the question of the “look back period” for Medicaid. As of July 1, 2012, the Department of Human Services (DHS) in Illinois does LOOK back 60 months. Iowa began implementation of the 60-month look back on June 1, 2006. DHS will examine all financial records for the last five years. DHS will require volumes of paperwork verifying certain transactions often times within a very short timeline. Without advanced planning, people are often denied benefits because they are unable to satisfy DHS’s requests in a timely manner. Or, sometimes people do not understand what is required by DHS and end up being denied because of it.

Often confused with the “look back period” is the “disqualification period.” Under DHS policy, any transfers made for less than fair market value during the look back period cause a disqualification period calculated using a formula specific to the situation. Confused? DHS prefers it that way. We have had many clients come to us with a decision from DHS that is calculated incorrectly, and we have had to intervene on the client’s behalf to get it corrected. Even that is no easy task. There are rules and procedures to follow, and DHS rarely explains that to the client. One wrong move, and you may have forfeited your options.

The general public also have come to commonly believe that if you have made any transfers during the look back period, you are automatically disqualified from receiving benefits for five years. That is not the case. The amount of the transfer determines the disqualification period. Sometimes it is only a few days, other times it may be a few years. You should not be deterred from exploring your options even if you have made transfers. However, make sure you talk to someone who knows the policies in detail, so that you really know your options.

This is complex stuff. I am routinely consulted by professionals across the board ranging from lay persons, DHS caseworkers, and even attorneys on these things. I could go on and on regarding this subject, as I am very passionate about our clients and their well being. I hear the saying, “you don’t know what you don’t know.” That is the bottom line. You need to talk to a professional well-versed in this subject matter before making any assumptions. The policy and the law change all the time, and you need somebody who works in this area constantly. What was once a policy and worked for others may now cause you undue problems. And, when faced with a loved one in long term care, the last thing you need is to make a wrong move.

Kathy Nitz is a Benefits Advocate for GolderCare Solutions. She uses her wealth of knowledge and experience in benefits planning to help seniors and those who are disabled.