Anyone who has applied for a government program knows how frustrating that process can be. But applying for Medicaid – forget it. I would rather go through a root canal!
Medicaid is a form of welfare
Medicaid is a federal social welfare program that is administered by the states that pays for long term care when a person runs out of money. It's intended to help people with little or no money. You have to qualify both medically as well as financially to be eligible. From a medical standpoint, you must show that you need assistance with at least three “activities of daily living” (or what are known as ADL's). For example, you may need help with bathing, or eating or administering medications. From a financial perspective, you need to show you have spent down your assets to the point where you are just about broke.
The 5-year look back rule – beware
What makes Medicaid so frustrating is that they go back 5 years and look at all your financial transactions to see if you gave any money away or paid for things on behalf of others. This is called the “look-back” period. This means you have to go back and show Medicaid all your bank statements for the past 5 years and explain all deposits and withdrawals. If you happen to be an organized person and a bit anal, you will have all these statements neatly saved in a nice folder all ready to go. But if you are like most of us (or if you are trying to help an elderly parent and have no idea where all this stuff is), you will need to go to the banks and request all these statements, along with copies of all cancelled checks. I liken it to a financial colonoscopy! What Medicaid is essentially looking for is to see if you (or your elderly parent) did anything that would have sped up your eligibility for Medicaid. Such transfers are not against the law, but they will trigger eligibility penalties, so you need to be careful about this. Here's a good article that explains the look-back rule in some more detail.
Serra Law Group can help
If you are involved in a situation where you or someone you know needs to apply for Medicaid, it is best to consult with an Elder Law attorney to get some assistance and guidance. This is especially true if you are aware of asset transfers that may trigger a Medicaid penalty. At Serra Law Group, we have been assisting people with Elder Law issues for close to 30 years and can help you navigate what can be a very daunting and nebulous process.