Category: Gifting

Medicaid Spend Down

Post author By sps
Post date December 18, 2023

Medicaid Spend Down for Senior Care

What to do when one’s assets are above the Medicaid limits.

Medicaid eligibility criteria will vary by state, each having a set amount of income and assets allowed for an elderly individual or couple looking to obtain Nursing Home Medicaid or HCBS Waivers.

Despite the limits in place, the Medicaid spend-down option allows seniors to legally qualify for Medicaid approval if their assets can be ‘spent down’ in accordance with the Medicaid spend-down allowances.

Medicaid Spend-down//Defined

In a nutshell, spend-down means that the state allows Medicaid applicants to subtract specific non-covered medical expenses and living costs from their countable assets to lower their asset total and qualify for Medicaid.

This program is also referred to as Surplus Income, Excess Income, Share of Cost, or Medically Needy.

*Although most states do, some states do not participate in this program.

What may be included in Medicaid spend-down?

If your loved one’s income and assets exceed the Medicaid limits, here are the specific details about expenses and assets that may be removed from the asset total, to hopefully amount to less than the state limits.

Income Spend-down

Spending down income is pretty straightforward and means that if an elderly applicant’s income exceeds the state’s limit, and his monthly medical bills add up to the exceeded amount or more, his net income will meet the eligibility criteria and thereby allow him to be approved for Medicaid.

Gifting

Medicaid and Gifting

Post author By sps
Post date November 19, 2020

Understanding the guidelines: IRS vs Medicaid on Gifting

Isn’t it frustrating when we make a mistake simply because we were misinformed? Remember the time that you missed the bus because the receptionist on the phone told you the incorrect time? Or you missed a business meeting because you were given the wrong directions? It certainly is frustrating when mistakes happen that could have been prevented.

While working at Senior Planning Services assisting people with their Medicaid Applications, we often come across people telling us, “I wish I would have spoken to you earlier. I wish I would have known all this five years ago.” The Medicaid guideline of gifting is an area in which there is a lot of confusion and many are misinformed.

Gifting Medicaid Connecticut

Here Is Your Holiday Gift… Followed By Your Medicaid Penalty!

Post author By sps
Post date December 19, 2014

The holiday season is just around the corner. So tradition entails gift giving to family and friends. For many, gifting $14,000 according to the IRS’s Gift Tax Exclusion is the perfect holiday gift. The annual Gift Tax Exclusion is the total sum of money per year that an individual may gift to an unlimited number of people without having to file a gift tax return or pay any gift taxes. Married couples may combine their annual exclusions, allowing them to gift $28,000 to each recipient.

While gifting is certainly allowed according to the IRS, Medicaid views gifting differently. No monies may be gifted within the five years prior to an applicant’s Medicaid eligibility date. Should Medicaid identify gifts or transfers when scrutinizing the financial history of the applicant, a Medicaid penalty will be assessed. The penalty will disqualify the applicant from Medicaid benefits for a period of time corresponding to the amount of care the gifted monies would have provided.This calculation is made using the CT Medicaid (Title XIX) penalty divisor rate of $11,851.00 per month.That would mean that if an individual gifted $11,851.00, they would would have one month of ineligibility for Medicaid benefits.

Seniors must exercise caution when gifting to family and friends, as they may be jeopardizing their Medicaid benefits.

Happy Holidays!

Gifting Medicaid New Jersey

When a Medicaid applicant owns a home – could it be successfully transferred to a child?

Post author By sps
Post date November 5, 2014

Senior Planning Services is the premiere Medicaid application company in the states of NY, NJ, PA and CT. We have been privileged to successfully process thousands of Medicaid applications on behalf of our clients. Our unique vantage point allows us to identify trends that have been occurring in regard to Medicaid’s enforcement of rules and policies. The following is a recent trend that we have identified.

When a Medicaid applicant owns a home, there are circumstances in which the asset is exempt and may be transferred without jeopardizing Medicaid eligibility. In the past, the applicant’s home could successfully be transferred to a child if the following two criteria were met:

1. The son or daughter has lived in the home of the applicant for a minimum of two years prior to institutionalization

2. There is a signed doctor’s note stating that the applicant was kept at home (as opposed to a facility) due to the care of the child who lived with the applicant.

Senior Planning Services has noted that the above referenced criteria have become less liberal. Medicaid may now disallow the transfer on the basis of any of the following:

1. If the child had a job that would impede their ability to fully care for the applicant, the Board of Social Services may request documentation in order to determine whether or not
the care was supplemented

2. If the applicant’s medical records do not reflect a need for care, a doctors note may not suffice as proof that there was a need for care.

Although we have seen numerous cases approved without the additional scrutiny, we have also seen cases where the additional requirements were enforced. If the Medicaid applicant meets the criteria of the more stringent interpretation of the policy, educating them to provide this information when applying may help facilitate faster Medicaid approvals.

Senior Planning Services is the most comprehensive and efficient Medicaid application company in the industry. The fact is that many long term care facilities absorb financial losses caused by preventable errors. Slow Medicaid approvals preceded by long pending periods, Medicaid penalties and worst of all Medicaid denials rob facilities of untold sums of revenues. Very often, the root cause of the aforementioned issues are based on actions or inactions attributable to the Medicaid applicant.
For a free Medicaid consultation contact Senior Planning Services at 1855.S.Planning (775-2664).

Gifting Medicaid Connecticut Medicaid New Jersey Medicaid Pennsylvania

Medicaid Planning – “Failing to plan is planning to fail”

Post author By sps
Post date September 3, 2014

If a hiker was setting out to cross Arizona’s Sonoran Desert, he would begin by planning weeks or even months in advance. He would be certain to pack all necessities such as water, clothing, a trail map, sun hats and anything that may be needed along the way. He will take the time to educate himself on the plants, snakes and scorpions that are found in the Sonoran desert.

As an avid hiker, I often reference hiking metaphorically as an analogy easily understood. I find that it helps folks mentally prepare for the Medicaid application mindset. When asked by prospective applicants “at what point should I start thinking about Medicaid for myself or my loved one?” I reference the Sonoran desert. Certainly, the time to think about the process is well in advance. Otherwise, if you wait too long, you are like the poor desert hiker who hasn’t prepared. Certainly, this is not an enviable position to be in. Alan Lakein once said ” Failing to plan is planning to fail.”

In order to help folks prepare for the Medicaid journey I would like shed light on some guideline that can positively impact prospective Medicaid applicants.

Medicaid guidelines dictate that an applicant may not gift money within the five years prior to Medicaid eligibility, generally referred to as the five year ”look-back” period. However, many mix up the Gift Tax Exclusion Act with the Medicaid gifting laws and believe that gifting $13,000 annually is permitted for Medicaid purposes. For the IRS it is permitted, but for Medicaid purposes it is not. Should Medicaid identify any transfers or gifts in the applicants reviewed financial history, Medicaid will impose a penalty. A penalty period is a defined period of time in which Medicaid will not pay for care. The penalty period is calculated based upon the amount of funds that were gifted or transferred divided by the penalty divisor. The divisor is a figure derived from the average cost of care at a nursing home.

Most of us generally don’t know whether we will be needing Medicaid for ourselves or our loved ones over the next five years. Therefore, planning in advance is crucial in order to preserves ones assets. There are numerous asset preservation opportunities that Medicaid guidelines afford applicants. There are spousal rules that protect the community spouse. There are rules that protect disabled children. There are possible methods of preserving the home in certain instances. There are options that require forethought and planning in order to successfully achieve the desired goals.

When I am given the opportunity to speak to the senior population, the above is something that I always stress to prospective applicants. Understanding the rules and the possible scenarios that may arise ranks as the most critical aspects of a successful Medicaid outcome. Prospective applicants need to be ahead of their needs or risk finding themselves In the Sonoran desert without their sunscreen.

resources

Understanding the guidelines: IRS vs Medicaid on Gifting