Medicaid Qualification Pitfalls

Posted on

Oct 27, 2015

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Navigating the rules for Medicaid qualification can be very difficult for many families. By the time that a family realizes that they need to figure out how to pay for nursing home or assisted living care, they are often in the middle of a health crisis. Because the cost of skilled nursing care is approximately $6,623 per month in the Denver metro-area, it is critical that families understand the options for paying for care.

If long-term care insurance and VA pension benefits do not cover the cost of care, Medicaid may be an option. Unfortunately, many families think that they have to do Medicaid planning more than five years in advance of needing care. However, the reality is that it may be possible to qualify for Medicaid even if a loved one is already receiving long term care. In fact, it is critical to make sure that a person can qualify for Medicaid before they have spent all their savings on care.

Under Medicaid regulations, if a person has given away assets within five years of applying for Medicaid (a period of time called the look-back period), it will trigger a penalty period. A penalty period is the length of time that Medicaid will not provide benefits. The length of the penalty depends on how much was given away prior to filing for Medicaid. The penalty period does not begin until the applicants countable assets are less than $2,000, and he has applied for Medicaid.

The problem is that many seniors believe that if they run out of money, Medicaid will be there to pay for the cost of their care. However, if gifts have been made within five years of application, it could endanger their ability to receive benefits.

Prior to applying for Medicaid, assets may need to be re-titled between spouses. If gifts have been made to other family members, it is imperative for the family to learn how to pay for the cost of care during the penalty period. This planning is best done in advance of depleting assets.

All Medicaid applicants must qualify based on their functional ability, income, and assets. To determine if an applicant meets the requirements and ensure that gifts will not cause ineligibility, it is best for the family to consult someone knowledgeable in elder law and Medicaid planning. Good advice can relieve the confusion and anxiety that many families feel during a health care crisis.

This article was submitted by Elizabeth D. Mitchell, Certified Elder Law Attorney (CELA).* Beth is an attorney with Ambler & Keenan, LLC and may be reached at 303-407-1543 or by email at For more information visit

*The state of Colorado does not certify attorneys in any field.

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