MIR Blog

MIR offers financial planning services designed to help elderly clients preserve their assets in safe investments so they may qualify for government financial assistance programs. MIR charges fees to assist elderly clients in submitting Medicaid applications, and we may receive commissions for annuities structured in the planning process. In 11 years filing Medicaid applications, we have never had an application denied.

We are not attorneys and do not offer legal advice or draft any legal documents. The decision to hire MIR is in no way equivalent to or a substitution for an attorney.

Dispelling the Myths About ICP Medicaid

Myth: “Doesn’t Medicaid pay ALL nursing facility costs?”
Reality: Actually, the applicant must pay a share of cost based on the applicant’s gross income. This amount is referred to as the “Patient Responsibility”. Medicaid only pays the facility the Medicaid rate less the Patient Responsibility paid by the applicant.

Myth: “Income of both spouses must be used to pay nursing home costs.”
Reality: Not true; only the applicant’s income is used to pay the nursing home each month. The spouse’s income is reported only for the purpose of determining if he/she can keep a portion of the applicant’s monthly income. Only if both spouses apply for Medicaid will each of their incomes be paid to the nursing home each month.

Myth: “If we admit dad to the nursing facility, mom will not have enough money to live on.”
Reality: Fortunately, the Medicaid program allows the spouse living at home (or ALF) to have a minimum of $1,839 per month to live on. If the spouse at home has gross income of less than $1,839 per month (2012), some of the Medicaid applicant’s income will be “diverted” to the spouse at home. This is referred to as “Spousal Income Diversion”. If the spouse living at home has a mortgage, rent or other housing costs, Medicaid may permit them to have more than $1,839 of monthly income.

Myth: “If you don’t tell them about the asset, they will not find out.”
Reality: This is wishful thinking. In submitting an application, the family signs a Financial Information Release. This form permits The Department of Children and Families to check all public and private records to verify income and assets. Most importantly, if information is intentionally withheld, this could be considered fraud.

Myth: “A single applicant (widow/widower) must spend down to $2,000 of assets to qualify for Medicaid.”
Reality: While it’s true that an applicant cannot have more than $2,000 of assets, it’s possible to avoid spending down the excess assets in order to qualify. If a single applicant has more than $2,000 of assets, there are ways to preserve their assets and still make them immediately eligible for Medicaid benefits.

Myth: “I can’t change my account to my spouse because of the five year look-back rule.”
Reality: An applicant can transfer any asset to their spouse and it will not cause a Medicaid penalty.

Myth: “I can gift $12,000 each year, can’t I?”
Reality: Each calendar year, an individual may gift $12,000 to anyone without having to pay federal gift taxes. The IRS refers to this as an Annual Exclusion Gift Allowance. However, the Medicaid rules do not permit such gifts. As such, Medicaid will review all asset transfers, including Annual Exclusion Gifts, to calculate the period of ineligibility.

Myth: “If you put an account in your son or daughter’s name, it won’t count as your asset.”
Reality: Gifts from the applicant are considered Uncompensated Transfers which cause a period of ineligibility for Medicaid benefits. Remember, there are options for overcoming periods of ineligibility
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Myth: “My name is on my mom’s account, so I’m 50% owner, right?”
Reality: No. If the applicant has unrestricted access to the funds, all of the funds are countable to the applicant. This is true unless a joint account owner can prove he or she deposited their personal funds into the joint account.