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Your Advocacy Connection

By Kathy Nitz
GolderCare Solutions

We Solve Long Term Care Problems

Commonly Held Medicaid Misconceptions

Last month, our Director of Business Development and Lead Care Advocate, Julie Arndt wrote an article for this publication dedicated to her mission of ensuring people don’t make missteps in the face of long term care. I would like to further her mission in discussing some of the misinformation people encounter when they are faced with the reality of paying for long term care.

First, when faced with the decision to place your loved one in some type of long term care, whether it be assisted living, supportive living or nursing home, one of the first thoughts that goes through your mind is, “HOW am I going to pay for this?”  When you get those bills for $6,000 to $7,000 every month, it is easy for panic to set in.

Everybody has heard of Medicaid. People also have in their minds what they believe Medicaid to be. Most people are wrong. It is not their fault. Most “professionals” only know bits and pieces of the puzzle. The Medicaid manual is huge. Our office decided we wanted to print the Illinois Department of Human Services (DHS) policy manual section on long term care a few years back – just so we had it should something happen to the internet and we needed to look up something. It filled two huge four-inch binders to the point of bursting.  That is a lot of policies! The DHS policies are governed by rules set out by the Joint Commission on Administrative Rules.  Those would be a complete set of rules in addition to the two huge policy binders! Let’s take a look at just two of the DHS rules to demonstrate the problem from the consumer side.

One of the most misunderstood aspects of Medicaid is the Five Year Look Back Period. People are terrified by this part – And with good reason. DHS often asks for information in a way that most people do not understand. A great example of this: DHS will ask for, “All property transfers for the past 60 months.” The public will read this request and determine they don’t have to provide anything to DHS because they have not sold any houses for 5 years. Ah Ha! You are denied! Why?  Because what DHS is actually asking for is a record of all purchases, sales, and gifts of ANYTHING for 5 years. Did you buy anything? Did you sell anything? Did you give anything away? Property is more than just real estate. Anything you own is “property.” As part of their process of looking for transfers, DHS asks for all financial records for 60 months. If you send bank statements and you miss even one page of one statement, you are often denied. DHS requires you to document every source of income and expenditure.

The second most misunderstood aspect is the house.  “They’re going to take my house!” People are firm in their belief on this matter.  Nobody takes the house.  We have tried to give houses to the State, and they won’t take them. Period.  HOWEVER, what will happen is that they want you to sell the house (at full market value) and use the money for your care before Medicaid pays. Or, if your name is still on the house when you apply for Medicaid, it is possible the State will place a lien on the real estate.  The State will recoup the money when the house is sold.  There are ways you can avoid this from happening.

Recently we were dealing with a family that came to us after the fact. Their mother was in nursing care and on Medicaid independent of any help from our office.  Two years later mother died.  Father continued to live in his home for some years, but eventually his health deteriorated to the point of having to move into long term care.  The family consulted us about ways to pay for his long term care as he had very few assets other than the house. Before we could apply for Medicaid, Dad died expectantly.  The only asset in his estate was his house.  Upon settling the estate, the attorney found that the State had placed a lien on the house when Mom went on Medicaid.  When they sold the house, half of the proceeds of the sale of the house went to pay back the State instead of being part of the heirs’ inheritance.  This could have been avoided if they would have fully understood how Medicaid worked.

With all of the confusing rules and misinformation available, before venturing out into the world of long term care, it would be my advice to consult with someone who looks at all of the layers of your situation, what has happened to your life over the last few years and what your ultimate goals are moving forward.  Be careful where you get your advice.  Does this person have years of experience and full knowledge of the rules? Who are they advocating for? For You? Or for their employer?  One wrong turn can cost you thousands of dollars.

Kathy Nitz is a Lead Benefits Advocate for GolderCare Solutions. She uses her wealth of knowledge and experience in benefits planning to advocate for seniors and those who are disabled.  You can reach Kathy at GolderCare Solutions Unlimited, LLC (309) 764-2273.

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.