One of the most commonly asked questions I get is “what is the timeline to apply for Medicaid and do the spend down?”
In other words, once we have a plan in place, how does this whole process work?
There are basically 5 stages to the process of applying for Medicaid. Here’s a quick overview:
- Find and move into a facility
- Begin spending down assets
- Apply for Medicaid
- Get approved
Clients who come to see us for what we call “crisis planning” are typically in one of the first 3 stages, although it’s possible and highly likely that they have taken them out-of-order (more on that in a second).
Here’s a video that covers everything in this post:
But if you would rather continue reading… Let’s start with the first stage, the pre-planning stage.
Pre-planning is probably the most important stage. Many clients who do not have lawyers never engage in this part of the process, or if they do they end up misinterpreting the rules or missing something along the way. This is a time when a family will first decide that entering a nursing facility is the best thing for their spouse or parent.
When they come to see our office for pre-planning, we will gather all the information we can from the family and put together a series of recommendations, also known as a “family asset protection letter”. While we do charge for this service, but have found it to be an invaluable part of the overall process.
By engaging in this type of pre-planning, the family will get a firm grasp on all of their asset protection options and can start making the process of transitioning their loved one into a facility that will provide them with a much higher level of care than they could ever get at home.
Finding and Placing Your Family Member in a Skilled Nursing Facility
The next step is probably the hardest step, and that is to find a place for your family member to live. There are a couple of very important things that you must consider at this point.
First and foremost, if the individual going into the facility is married, do NOT spend down any assets at this point. Most people make the mistake of starting to spend down assets too soon.
For a married couple, there is a very important date called the “snapshot” date. This is the last day of the month preceding the day that the family member entered the nursing home or hospital (or any combination of the two) for at least 30 continuous days. It is not uncommon for the snapshot date to occur months or even years before the date a Medicaid application is submitted.
Because a spouse is only permitted to keep ½ of the marital assets up to $120,900 (as of 2017), then you want to have as many assets on hand as possible as of the snap shot date. This is called the Community Spouse Resource Allowance, or CSRA. So for example, if a couple has $250,000 in total countable assets as of the snapshot date, they would be permitted to keep $120,900 for the “well spouse” and $2,000 for the institutionalized spouse, for a total of $122,900. The remaining $127,100 would need to be spent down.
Now, if the couple makes the mistake of spending down assets too soon, which many people do, here is how that would work. Let’s say the same couple knew that they could keep $122,900 in total assets so they started spending down their assets before moving the institutionalized spouse into a facility and had $122,900 on hand as of the snap shot date.
At this point, the couple would need to spend down an additional $59,450 to get them to $63,450 in total assets. This is ½ of the $122,900, or $61,450 plus an additional $2,000 for the institutionalized spouse.
I know this seems confusing – but it is important, and if you don’t get it right it could cost you thousands of dollars.
So don’t make the mistake of spending down assets too soon!
The second thing you must consider is that your loved one will need for their primary care doctor to complete a form called an FL-2. This is a one-page document that sets out the level of care that the patient will need, and helps the facilities determine whether or not they can assist with that need. Commonly, the facility will have their own doctor examine the patient and complete their own FL-2 to confirm the level of care recommended by the patients primary care physician.
Begin Spending Down Assets
Once you have found a facility that will accept your loved one and placed them there, it is time to start spending down assets according to the plan we have laid out in step #1. I’ve written extensively about what that means here. If you had previously retained our firm to complete the pre-planning listed above, then you have a good idea of what is required at this point via the asset protection letter we draft for our clients when they first come to see us.
Apply for Medicaid
While you are in the process of spending down assets, it is a good time to start gathering all the documents you will need to apply for Medicaid. If you do not know where to start, you can sign an authorization and our office will work with your bank to get the 5 years worth of bank statements required for the application. Other documents you will need to gather include the applicant’s driver’s license, social security card, birth certificate, and income information (i.e. social security, pensions, etc.).
Once the spend down has been completed and we have gathered all your financial documents, we will prepare the Medicaid application for you and submit it to the Division of Social Services (DSS) office in the county where the applicant resides. We typically also include a comprehensive letter with the application to give DSS a summary of the application, any known issues, and legal support to assist them in approving the application.
The last stage of the process is getting approved for benefits. It is important to understand that while waiting to get approved, we will calculate the patient’s expected monthly private pay responsibility. This could vary depending on the whether the institutionalized individual is married or single. But regardless, it is important to not pay more than the amount we recommend.
Medicaid will pay benefits retroactive to the date that the applicant qualified for benefits. When the nursing home receives this payment, they will issue a refund for any over-payments made since the date of the application. If this payment comes back to the applicant, it could bump them over the $2,000 asset limit and kick them back off Medicaid!
For that reason we will calculate what you should pay the facility while the Medicaid application is pending.
Do You Need Help Applying for Medicaid?
If you need help applying for Medicaid, please feel free to fill out our contact form or simply call our office at (919) 460-5422 to schedule a quick call to discuss how we might be able to help you with the process.
Navigating this process is complicated, but it’s what we do. Let us be your guide to make sure you can protect everything your loved one spent a lifetime to build.