Funeral planning is never on the top of anyone’s to-do list; however, many seniors are unaware that prepaying for their funeral arrangements is one of the expenses that Medicaid allows as part of spend-down. The Department of Human Services recognizes that Medicaid asset requirements ($2,000 in many states) don’t leave beneficiaries with the available funds to have their end-of-life wishes honored without becoming a burden to others. Setting up a prepaid funeral also has the added benefit of locking into current rates even if the price goes up.
The terms Medicaid and Medicare sound almost interchangeable, yet these two healthcare assistance programs differ greatly.
As one of the most frequently asked questions by callers who reach out to the intake department at Senior Planning Services, we’ve found that many people don’t know which program is right for them: Medicare, Medicaid or both?
Last week, one of our intake representatives received a call from Bob. He was calling about his mother Joanne who had been in the hospital for a hip replacement and was moving into a rehab facility. Her funds were dwindling and he was concerned that she would not have the resources to cover her stay. Joanne was already enrolled in Medicare, but the nursing home had advised her that it may not cover her entire stay. With only $10,000 left in funds for Joanne, Bob was afraid that he would be left to foot the bill.
Our own Michael Steinberg was featured in a Huffington Post article earlier this month. He offers information and advice on the two eligibility categories related to Medicaid applications: clinical eligibility and financial eligibility.
Clinical Eligibility
Clinical or medical Medicaid eligibility and reimbursable services are determined by individual state criteria. Michael explains that proof of clinical eligibility is not a complicated process.
Financial Eligibility
On the other hand, proving an individual qualifies for Medicaid services based on their financial standing is a daunting task. Applicants must gather financial documentation for five years – which is known as the five year look back. Every cash-value asset must be reported to show proof of financial eligibility.
The Problem faced by Skilled Nursing Facilities
What does this mean to skilled nursing facilities? If a patient is having trouble obtaining Medicaid approval, the facility is no doubt having trouble getting paid. About 55 percent of nursing home patients are on Medicaid, delays in reimbursements based on eligibility could be a big financial hardship to the nursing home business.
Michael advises that the best way to prepare for what’s ahead is to be well versed in Medicaid rules and guidelines. An even better idea is to leave it to the experts, such as the team at Senior Planning Services.
The cost of senior care strains many family budgets to the breaking point. You want to offer your loved one the best care possible, but cost is a major factor in determining the facilities that will work for your family. To help make senior care more affordable, there are several payment options to consider. It’s important to keep in mind, however, that a number of these options are available only for seniors and families who have taken the time to think ahead and plan according to their upcoming needs.
Medicaid is a joint federal and state health care safety net for low income seniors, children and disabled citizens. Since it is funded by both the federal and state governments, there is much variation from state to state as to what is covered and who is covered.
The amount of the Medicaid lien corresponds to the amount of money Medicaid had paid for the care and needs of the deceased Medicaid recipient during their lifetime.
Below we’ve provided an example to better illustrate the way it would play out in real life circumstances.
Say a deceased Medicaid recipient owned a property with $100,000 of equity. If the Medicaid recipient resided in a skilled nursing facility for 11 months, Medicaid would have paid approximately $110,000 with the average monthly Medicaid rate at nearly $10,000 a month. With this situation Medicaid would acquire full ownership of the property since they have paid more than the $100,000 of equity in the home to recover some of their losses.
If the Medicaid recipient was in a skilled nursing facility for approximately three months in which Medicaid paid out about $30,000, Medicaid would place a lien on the property for $30,000 and recover the money once the property sold. The remaining $70,000 would be left to the heirs.
Heirs may sell the home and use the proceeds to satisfy the Medicaid lien or if the wish to keep the home, they may payoff the lien with their own personal funds.
We're Here to Help
SPS specializes in helping applicants with the Medicaid process. Find out more info about Medicaid in your state
The Medicaid application process sometimes requires legal advice and the assistance of an attorney. Senior Planning Services does not provide any legal advice or services. You may wish to consult with an attorney concerning your Medicaid application.
