In my last column, I identified common mistakes made which disqualify individuals from Medicaid eligibility. Recall that Medicaid is the Federal program which provides financial assistance for the costs of nursing home care for individuals that meet the requirements of limited income and resources.
Strategies to avoid violating Medicaid look-back rules and avoiding penalties can help families keep some of their assets while still qualifying for Medicaid. A Medicaid planning attorney can help you identify which strategy is best to implement. These strategies can be extremely complex and require professional guidance.
Caregiver Agreements – These formal agreements permit compensation to the caregiver, spending down assets for services without violating the look-back period. These contracts between a caregiving relative, friend, or older adult permit a senior to receive necessary care that Medicaid does not cover while also providing the caregiver with needed compensation. This contract requires the services of an attorney to ensure its careful drafting.
Irrevocable Burial Funds – This type of accounts sets aside a specific amount of money (within state limits) for the sole purpose of funeral and burial costs. This trust helps applicants spend down excess assets without violating the Medicaid look-back period.
Undue Hardship Waiver – Filing an undue hardship waiver request occurs when individuals violate the Medicaid look-back period, but it renders them without basic needs like shelter and food. It is extremely difficult to receive this waiver as there must be an effort to exhaust all avenues of asset recovery, including legal options.
Recuperation of Assets – If previously transferred assets during the look-back period can be recovered, the previous penalty established can be reconsidered. Partial recovery of these assets may shorten the penalty period. If the returned assets will put an applicant over the Medicaid asset limit, these assets can then pay for long-term care as the applicant reapplies.
Medicaid Complaint Annuities – In some situations, a Medicaid compliant annuity may be used to accelerate Medicaid eligibility while either (a) avoiding the imposition of a penalty period or (b) paying through a penalty period that has been assessed. Some annuities qualify, while others do not. This strategy requires careful consideration and should only be employed after consultation and direction from someone qualified in Medicaid planning.
The surest way to avoid violating a look-back period infraction and qualify for Medicaid is to consult a qualified Medicaid planning attorney before making the gift or transfer. Call 570-784-4654 to schedule an appointment with one of our Certified Medicaid Planners.